EURUSD traded steadily higher yesterday from its intraday low at 1.1006 to peak at 1.1038. By the end of the New York session, the currency pair was at 1.1030, 22 pips higher from its opening price.
Amid fears of the coronavirus, the rally on EURUSD may have been fueled by better-than-expected data from Europe. It was reported yesterday that German unemployment fell by 2,000 for the month of December. It was expected that 5,000 people filed for unemployment benefits for the month. Meanwhile, the euro zone’s unemployment rate dropped to 7.4% in December. The consensus was for a 7.5% uptick to match its reading for November.
As of this writing, however, EURUSD is down 13 pips from its opening price. It could be driven by risk aversion once again. The spread of the coronavirus has showed no signs of stopping. The number of confirmed cases has already surpassed the SARS outbreak of 2003 at 9,776. The death toll has also dramatically risen to 213 from 130 yesterday. Consequently, the WHO has called a ‘global health emergency’ on the outbreak.
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EURUSD Outlook
Remember the support level I pointed out on EURUSD yesterday? The currency pair found enough bids around 1.1000. On the 4-hour time frame, we can see that EURUSD is testing support at a short-term trend line (January 16, January 21, and January 23). A few bearish candlesticks have already materialized which could suggest that EURUSD may soon fall to yesterday’s lows at 1.0990. On the other hand, a bullish close above yesterday’s highs around 1.1037 may suggest that EURUSD still has room to trade higher. Near-term resistance is at 1.1070 where the medium-term trend line seems to be (from connecting the highs of December 31, January 16, January 21, and January 23).