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EURUSD: expecting a drop to 1.0945

On Monday the 30th of March, trading on the euro closed down. The US dollar rose against the majors following a week of decline as investors prepare for a long period of uncertainty. This rise looks like a technical correction.

Trading on the US stock market closed up. The S&P 500 posted its highest weekly rise in percentage terms in 10 years. Stock indices were boosted by the announcement of a $2.2tn stimulus package for the US economy.

Day’s news (GMT 3):

  • 10:55 Germany: unemployment rate (Mar).
  • 11:30 UK: GDP (Q4).
  • 12:00 Eurozone: CPI (Mar).
  • 15:30 Canada: GDP (Jan).
  • 16:00 US: S&P/Case-Shiller home price indices (Jan).
  • 16:45 US: Chicago PMI (Mar).
  • 17:00 US: consumer confidence (Mar).

EURUSD: expecting a drop to 1.0945

Current situation:

Expectations of a drop on the EURUSD were met, except that the bears broke through the trend line in this morning’s Asian session. Fears over the spread of the coronavirus continue to reign supreme over the currency market.

We reckon that the downwards correction is set to continue. It would be nice to see a test of 1.0945/50 first. If the rate stays above 1.0953 today, then we can expect to revisit the 1.1148 high. Also bear in mind that the nonfarm payrolls report comes out in the US on Friday. Markets are already bracing themselves for a bad showing. Because of this, trading is likely to remain flat until Friday. Today, we’re forecasting a drop to the D3 line at 1.0945, followed by a bounce to 1.1035.

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