- EUR/USD finds traction at $1.0850
- ECB meeting this to determine the movement of the pair
- Uninspiring PMI data weighing in the price of the euro
The EUR/USD currency pair continues to be under pressure despite finding some limited traction on Monday above $1.0850. The ECB meeting expected later this week has been weighing in the pair which is at risk of a disappointment or surprise depending on the pricing of interest rates.
Bearish sentiment on EUR/USD ahead of the ECB meeting
The EUR/USD price could slide lower considering the PMIs released last week show that the COVID-19 pandemic has hit the global economy hard. The figures provided by HIS Markit indicate that the Eurozone economy is shrinking at 7.5% per quarter and the second quarter could report the worst downturn in years.
Expectations ahead of the central banks’ meetings are low despite growing pressure for the banks to support economies amid the coronavirus fallout. However, investors are only interested in the future as uncertainty surrounding COVID-19 endures.
Investors are adjusting their positions ahead of the ECB monetary policy decision. There is optimism that the ECB will hold the monetary policy but there is also a possibility that the ECB could enhance the size of the Pandemic Emergency Purchase program.
Because of the gloom outlook the EUR/USD has continued to drop and it doesn’t seem that a reversal is on the path in coming weeks unless there is a surge in market optimism to push the appetite for risky currencies such as the EUR. Currently, the EUR/USD pair is trading its SMAs which is a bearish indicator.
There is the bearish sentiment on the pair and strong resistance is expected at $1.0900 which the pair has to break before any upside. On the flip side, support is waiting at $1.0810 level that has been witnessed twice in the past weeks followed by $1.0770.
Time : 28-04-2020
Pivot : 1.0833
Technical View : Long above 1.0853
Target : 1.0865
Technical View : Short below 1.0813
Target : 1.0793
Comments : Bearish sentiment and ECB monetary policy could push prices lower
Last Price : 1.0850