- EUR/USD pushing for weekly lows around $1.08
- EU fails to agree on a fiscal deal to support the economy
- Weaker PMI data could boost sentiment on the single currency
On Thursday EUR/USD dropped 0.43% to 1.0776 after EU leaders were unsuccessful in coming up with a stimulus package against COVID-19 as members are on loggerheads on ways of financing it. Early in the session the Euro rallied hitting intraday high of $1.0845.
EU fails to agree on the coronavirus stimulus package
The European Union has 27 members agreed on a short-term plan of $540 billion to support economies and businesses from the COVID-19 fallout. However, experts have warned that a bigger stimulus plan is required to offset the impact of the pandemic. Before the meeting, a 2 trillion euro plan had been floated but the bloc members could not agree on the financing of the deal.
The EU’s preliminary data for April could impact on the sentiment around the pair. If the data is weaker than anticipated then that will boost the appetite around the currency. Consumer confidence dropped from -11.6 in March to -22.7 in April. PMI for April is expected to drop to 39 from 45.4 last month.
Analysis of EUR/USD
The single currency is on the defensive heading to the weekend following some recovery after bottoming from the new monthly lows in the 1.0725/30 band. Currently, a level below $1.08 is likely to offer support to the single currency but further movement down could mean that the EUR/USD could test the $1.065 level.
However, if sellers maintain control the year to date $1.635 low seen in March could be the nest relevance target. But downward pressures on the single currency could result in the recovery of recent highs around the $1.0990/1.100 region. There are no major moves expected in the pair and it could form resistance at around 1.08.
Pivot : 1.0791
Technical View : Short position below 1.0771
Target : 1.0751
Last Price : 1.0810