Yohay Elam, an analyst at NDDFX, gives five reasons to favor the EUR/USD downside, not all corona-correlated.
“Oil crash: Contracts on WTI oil for May crashed below zero. The rout represents the diminishing demand for the most-used commodity amid the coronavirus lockdowns and the storages are becoming flooded. The crash in petrol prices is boosting the greenback.”
“North Korea: According to reports in the US, the rogue regime’s leader Kim Jong-un was in a grave situation after undergoing heart surgery. Any succession battle may endanger the world and is another boost for the dollar.”
“Fears of EU Economic damage: The Bank of Spain estimates a double-digit fall in GDP this year and sees tourism returning to work only in 2021. The German ZEW Economic Sentiment beat expectations with 28.2 points but Current Conditions disappointed with -91.5.”
“European Union in disunity: Leaders of the bloc are gearing up for another battle about mitigating the economic fallout from the coronavirus. Spain has offered a package worth €1.5 trillion, and this is supported by several officials in Brussels such as Frans Timmermans, the Executive Vice President of the European Commission.”
“More disappointing US data: Last week’s disappointing statistics worried investors and boosted the dollar. Existing Home Sales figures for March carry relatively upbeat expectations, which may be misguided.”