EURUSD: euro still under pressure

On Thursday the 23rd of April, trading on the euro closed down. Market volatility was high. After breaking the support at 1.0817,the pair dropped further to 1.0756. After this, buyers recovered to reach fresh highs. The euro sharply surged against the dollar after German chancellor Angela Merkel said that this is just the beginning of the coronavirus. By close, the euro had erased all its gains after reports that EU leaders had failed to reach an agreement on an economic recovery fund. The pair returned to 1.0762.

Stock indices also lost ground. They were downed by news that initial trials of a medicine called Rendisivir, developed by Gilead Sciences, had been unsuccessful.

Day’s news (GMT+3):

• 11:00 Germany: IFO – business climate (Apr), IFO – expectations (Apr), IFO – current assessment (Apr).
• 15:30 US: durable goods orders (Mar).
• 17:00 US: Michigan consumer sentiment index (Apr).
• 20:00 US: Baker Hughes US oil rig count.

Current situation:

The fundamentals are driving the euro. When there’s positive news, it goes up against the dollar, and vice versa. In Friday’s Asian session, the euro hit fresh lows, shedding 0.23%. The major currencies are trading down. Trading on the euro crosses is mixed. Considering that Standard & Poor’s is expected to downgrade Italy’s credit rating today, pressure on the single currency is set to remain at least until the US session. As such, we predict a drop to 1.0708 to the lower line of the channel and the 112th degree. If this drop takes the form of a wedge, we can expect a bounce from around 1.0700/710.