The EUR/USD pair is struggling to maintain the rebound witnessed early this week as EU finance ministers continue to disagree on a stimulus package that will help cushion the economy against the impact of COVID-19. However, the EUR/USD might have to contend with range-bound conditions over Easter following its failure to extend the lows and lower highs brought from last week.
ECB adopts measures to prevent a recession
On Wednesday the spot suffered some modest losses after Spain reported a surge in the number of COVID-19 deaths. On the other hand, the European Central Bank has indicated that it is committed to maintaining the low-interest rates for some time. According to Kathy Lien of BK Asset Management, the economy could shrink by 10% and this has added a more bearish sentiment to the single currency.
Although the pair dropped it nonetheless performed well within the trading range of Wednesday on Monday. The ECB has adopted extraordinary collateral measures to combat the worsening financial situation in the EU.
The exchange rate pulled from $1.0927 which was a weekly high and under the current conditions it might face pressures considering the flight to safety will benefit the US dollar. However, EUR/USD could consolidate as we head to the Easter holiday after snapping a series of lows and highs this past week.
The exchange rate curved a significant low at the end of last year and the beginning of this year the EUR/USD hit a high with the exchange curving another high in February. Its opening range for the last most was irrelevant considering the volatility experienced because of COVID-19. The EUR/USD pulled back from yearly highs of $1.1495 breaking from the $1.0778 February low.
The recent recovery of EUR/USD after a series of attempts to close at the $1.1140 level shows that the exchange rate could bounce in the coming days. Currently, EUR/USD has established resistance at $1.0902 and support levels at $1.0822.