EUR/USD regains the 1.08 area on dollar weakness
- EUR/USD bounces off weekly lows near 1.0730 on Friday.
- The dollar is seeing some correction lower to the 100.30 area.
- US Durable Goods Orders contracted 14.4% in March.
After bottoming out in fresh weekly lows in the 1.0730/20 band, EUR/USD managed to regain composure and returned to the positive territory and to the 1.08 neighbourhood.
EUR/USD bid after poor US data, USD-selling
EUR/USD extended the rebound to the 1.08 area at the end of the week following another set of disappointing results in the US docket. This time headline Durable Goods Orders contracted at a monthly 14.4% during March, while Core orders also dropped 0.2% inter-month.
In addition, the final U-Mich index came in at 71.8 for the current month, a tad above forecasts although markedly lower from March’s 89.1.
In the domestic docket, the euro suffered the lower-than-expected prints from the German Business Climate tracked by the IFO survey earlier in the session, deteriorating to 74.3 for the current month (from 85.9).
All in all, the single currency managed well to reverse the initial sour atmosphere surrounding the single currency after another fiasco at the Eurogroup meeting showed EU leaders agreed on Thursday that further action is much needed to counter the devastating (albeit asymmetrical) impact of the coronavirus in the region, although, once again, no decision has been made on the subject. The leaders will meet again on May 6th.
What to look for around EUR
The euro remains on a bearish note so far this week, always looking to developments from the coronavirus and its impact on the economy and dollar dynamics as the main drivers of both sentiment and price action. On the more macro view, the single currency is expected to remain under scrutiny in the next periods in light of the forecasted contraction in the economy of the region in the first half of the year, relegating hopes of a strong recovery to Q3 and/or Q4.
EUR/USD levels to watch
At the moment, the pair is gaining 0.13% at 1.0790 and a breakout of 1.0814 (78.6% Fibo of the 2017-2018 rally) would target 1.0990 (weekly/monthly high Apr.15) en route to 1.1041 (200-day SMA). On the flip side, immediate contention is located at 1.0727 (weekly low Apr.24) followed by 1.0635 (2020 low Mar.23) and finally 1.0569 (monthly low Apr.10 2017).