- EUR/USD is on the rise but struggling to take out Wednesday’s high.
- The bulls need to invalidate Wednesday’s doji candle to invite stronger buying pressure.
- Coronavirus has hit the US shores and could keep the dollar on the defensive.
- Euro to take cues from the Eurozone consumer and industrial confidence data.
EUR/USD is flashing green ahead of the London open. The currency pair is currently trading just above 1.09, representing 0.22% gains on the day, having hit a low of 1.0876 in Asia.
Focus on today’s close
The pair formed a classic doji candle on Wednesday, signaling indecision in the market place and making today’s close pivotal.
A close above 1.0909 (Wednesday’s high) would imply a continuation of the recovery rally from recent lows near 1.0778. Alternatively, a close below Wednesday’s low of 1.0855 would mark an end of the corrective bounce and open the doors for a fresh sell-off.
At press time, the odds appear stacked in favor of a bullish close, as the dollar may not find love amid fears of coronavirus hitting the American shores. On Wednesday, the Centers for Disease Control and Prevention (CDC) confirmed the first case of coronavirus in the US.
Further, EUR/USD one-month risk reversals, a key option market metric, has shed bearish bias.
The bullish close, however, may remain elusive if the Eurozone Consumer Confidence and Industrial Confidence data for February print below estimates.
The Consumer Confidence, due at 10:00 GMT, is forecasted to remain unchanged at -6.6. The Industrial Confidence is also expected to remain unchanged at January’s reading of -7.3. The pair may also take cues from the Eurozone Services Sentiment, Business Climate, and the Economic Sentiment Indicator. Across the pond, the US Durable Goods Orders figure for February is scheduled for release.