EUR/USD: Growing COVID-19 cases could weigh over the single currency

  • EUR/USD ticks higher with the S&P 500, ignores weakness in APAC stocks. 
  • Big gains look unlikely as virus resurgence sours risk appetite. 
  • ECB Villeroy de Galhau says monetary policy needs to remain loose to achieve price target. 

While EUR/USD is flashing green at press time, the upside looks limited as the rising number of coronavirus cases are likely to weigh over the European equities.

At press time, the pair is trading at 1.1240, representing a 0.20% gain on the day. The dollar is trading weak, possibly on the back encouraging news related to coronavirus vaccine and the resulting uptick in the US stock futures. The S&P 500 futures are currently reporting 0.10% gains, having declined by more than 0.5% early Monday.

However, China news has failed to put a bid under the Asian equities and the European stock futures. As of writing, major Asian indices like Nikkei, S&P/ASX 200, Hang Seng are down at least 1% each. Stocks in China, too, are reporting a 0.7% decline. Meanwhile, futures tied to France’s CAC index and Germany’s DAX are down 0.4% and 0.10%, respectively.

The nervous mood could be associated with the fears of the second wave of the virus outbreak. The number of cases across the globe rose above 10 million over the weekend. The US posted record virus cases for the third straight day on Saturday and Tokyo recorded 60 new cases on Sunday, the highest daily tally since May 4.

With virus resurgence souring risk appetite, the odds appear stacked against a sustained uptick in EUR/USD. In addition, dovish comments made by the European Central Bank policymaker Francois Villeroy de Galhau on Sunday could cap gains in the common currency. The policymaker said that the monetary policy need to remain loose until the central bank’s inflation target of 2% is clearly in sight.

On the data front, Eurozone economic and business sentiment indices are scheduled for release at 09:00 GMT on Monday, following which the focus would shift to the German Consumer Price Index (MoM) (Jun), due at 12:00 GMT. Across the pond, the US housing data and regional Fed manufacturing indices are due for release.

Technical levels

EUR/USD

OVERVIEW
Today last price 1.124
Today Daily Change 0.0022
Today Daily Change % 0.20
Today daily open 1.1218
TRENDS
Daily SMA20 1.126
Daily SMA50 1.1037
Daily SMA100 1.0999
Daily SMA200 1.1035
LEVELS
Previous Daily High 1.1239
Previous Daily Low 1.1195
Previous Weekly High 1.1348
Previous Weekly Low 1.1169
Previous Monthly High 1.1145
Previous Monthly Low 1.0767
Daily Fibonacci 38.2% 1.1223
Daily Fibonacci 61.8% 1.1212
Daily Pivot Point S1 1.1196
Daily Pivot Point S2 1.1173
Daily Pivot Point S3 1.1152
Daily Pivot Point R1 1.124
Daily Pivot Point R2 1.1262
Daily Pivot Point R3 1.1284


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