EUR/USD fails to break 1.1000 and turns negative on the day
May 21, 2020
The euro is set to end a four-day rally on Thursday. EUR/USD’s bounce from 1.0775 lows last week has been capped at 1.1000 psychological level, and the pair has pulled back to the mid-range of 1.0900.
Euro rally loses steam as market sentiment deteriorates
The EUR/USD has pulled back from 1.1000 highs on early North American trading session, as market mood dampened following negative macroeconomic data and Trump’s accusations to China for trying to interfere in US elections. Trump’s comments have spurred the Sino-Us tensions, triggering fears about a trade war escalation which have reflected on a stronger dollar and negative equity markets
Prior to that, the euro had rallied about 1.6% this week, buoyed by hopes that the plans to ease lockdown restrictions would accelerate economic recovery. Furthermore, the Franco-German agreement for a €500 billion proposal to aid coronavirus-hit sectors and economies boosted hopes of advancing towards a fiscal union, which has increased confidence on the common currency.
EUR/USD: strong resistance at 1.1017 – UOB
The FX analysis team at UOB observes the euro right below a key resistance area at 1.1014/19 which, so far, is holding bulls at a bay, “EUR is expected to trade with an upward bias towards 1.1017. The odds for a break of this level have improved but are still not high. Looking ahead, EUR has to close above 1.1030 before further sustained up-move can be expected.”