EURUSD Tests 1.12 Ahead Of the EU Coronavirus Fund Meeting

EURUSD gives up the morning European session gains and now tests for one more day the 1.12 mark. The correction from three-month highs continues while we might see an acceleration of the downward pressures in case the pair breaks below the 1.12 round figure.

Investors follow the European Council meeting as the EU leaders meet to discuss the details of the proposed €750bn coronavirus recovery fund. The recovery fund is designed to finance grants and loans to EU members to offset the coronavirus recession. Funds would be allocated according to the size of a member state’s economy, population, unemployment rate, and to make countries hit the hardest by the coronavirus crisis the primary beneficiaries. The fund is positive for the common currency, but traders have to be cautious as not all EU member states agree with the proposed structure of the fund. A disappointment from the EU meeting today might put some pressure on the common currency.

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EURUSD Price Technical Analysis

EURUSD is 0.02% lower at 1.1201 close to two-week highs as the pair trades lower for the fourth consecutive session. The recent correction moved the RSI index from the overbought area while a break below the 1.12 might attract more sellers to join the action. The technical picture remains bullish for the pair despite the recent correction. Only a break below the 200-day SMA can cancel the bullish momentum.   

On the downside, first support for the EURUSD stands at 1.1194 the daily low. Next support area would be met at 1.1187 the low from yesterday trading session. If the EURUSD breaks that support, then the next target for bears is at 1.1164 the low from June 3 trading session. 

On the other side, the initial resistance stands at 1.1221 the daily top. If the pair breaks that resistance, then the next hurdle is at 1.1266 the high from June 18 trading session. A credible break above might open the way for a test of the June 16 highs at 1.1359.

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