- EUR/USD extends gains to the vicinity of 1.0900.
- European countries look to gradually re-open the economy.
- EMU Current Account surplus widened to €40.2 billion.
The single currency has started the week on a firm note, prompting EUR/USD to test the upper end of Monday’s range near 1.0900.
EUR/USD looks to COVID-19 developments
EUR/USD is looking to add to Friday’s gains, although a test/surpass of the key barrier at 1.0900 the figure still remains elusive.
In the meantime, developments from the coronavirus keep dictating the risk appetite trends for the time being amidst efforts from some countries to relax some of the lockdown measures as well as to start opening the economies albeit at a snail pace.
Furthermore, the Spanish government will propose a €1.5 trillion fund to help countries recover from the coronavirus aftermath. This plan is expected to be presented on Thursday at the Eurogroup meeting.
In the docket, the EMU’s Current Account surplus widened to €40.2 billion during February (from €31.8 billion. Across the pond, the Chicago Fed National Activity Index will be the only release later on Monday.
What to look for around EUR
The euro remains on a cautious mood at the beginning of the week, always looking to the coronavirus and its impact on the economy as the main driver 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. In the very near-term, attention is likely to remain on the upcoming Eurogroup meeting as well as potential announcements of extra stimulus in the euro area.
EUR/USD levels to watch
At the moment, the pair is gaining 0.13% at 1.0884 and a breakout of 1.0990 (weekly/monthly high Apr.15) would target 1.1050 (200-day SMA) en route to 1.1147 (weekly high Mar.27). On the flip side, immediate contention aligns at 1.0812 (weekly low Apr.17) followed by 1.0768 (monthly low Apr.6) and finally 1.0635 (2020 low Mar.23).