- EUR/USD bounces up on dollar weakness, to reach 1.0820 high.
- Investors’ doubts about the EU stimulus package remain weighing on the euro.
- Longer-term, EUR/USD’s risk remains skewed to the downside – Credit Suisse.
The euro has staged a solid rebound on Friday, buoyed by a mild recovery of risk appetite. The EUR/USD has bounced up from 1.0727 lows to regain almost 100 pips on the day, reaching 1.0820 area before pulling back to levels right below 1.0800.
Eurozone stimulus doubts keep euro bulls at bay
The euro is trimming losses today, after a four-day losing streak that pulled the pair to one-month lows. The market sentiment, somewhat brighter today, has undermined the dollar supporting the euro in spite of the downbeat German IFO Business Climate Index data.
The enthusiasm with the common currency, however, is limited. Investors are focusing on the EU meeting to specify the details of the COVID-19 rescue package, due next Thursday. Yesterday’s agreement has failed to calm markets as the differences on the details of the package are threatening with delaying the approval of the recovery fund.
EUR/USD remains bearish on a longer-term – Credit Suisse
From a longer-term perspective, the currency analysts at Credit Suisse remain bearish on the euro, pointing out to the 1.0745 level as an important support level, “We continue to look for a sustained break to see the long-term uptrend break as well as confirm the completion of a bearish ‘triangle’ continuation pattern, to suggest a more sustained down move is underway. Below the 78.6% retracement of the late March rally at 1.0745 should further reinforce the rally to expose the year-to-date low at 1.0635.”
EUR/USD key levels to watch