EUR/USD Forecast: Short-Term Neutral, But The Risk Is Skewed To The Downside

EUR/USD Current Price: 1.0862

• Crude oil prices collapsed, exacerbating the dismal market mood.
• The EU Commission spurred rage after assigning Hungary almost double the relief than to Italy.
• EUR/USD short-term neutral, but the risk is skewed to the downside.

It was a slow start to the week in terms of activity in the FX board, as most major pairs remained confined to familiar levels. Collapsing oil prices, however,  were in the eye of the storm. The barrel of WTI plunged to a multi-decade low of $1.00 a barrel, as the coronavirus pandemic erased demand for the commodity, dragging equities lower across the world. As for currencies, major pairs remained within familiar levels, without relevant directional movements across the FX board. The EUR/USD pair is ending the day little changed at around 1.0870, after a failed attempt to recover the 1.0900 threshold.

The European Commission has announced that, within its Coronavirus Response Investment Initiative, Hungary, which has 172 coronavirus fatalities, will get €5.6bn double the amount Italy will receive. With the death toll above 23.6K, Italy will get €2.3bn. The news has spurred rage, and for sure, won’t help the shared currency strengthen.

The macroeconomic calendar was light as if offered minor figures from both shores of the Atlantic, which the market ignored. Nevertheless, the figures continued to reflect the effects of the lockdown in economies. This Tuesday, Germany will publish its April ZEW Survey on Economic Sentiment, expected to have improved, but also to remain near record lows. The US will publish March Existing Home Sales, foreseen down by 8.1%.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair has held within a range defined by Fibonacci level, as support is being provided by the 61.8% retracement of the latest daily advance around 1.0830, while sellers surge in the 1.0890 price zone, the 50% retracement of the same rally. The short-term picture is neutral-to-bearish, as, in the 4-hour chart, technical indicators are turning marginally lower but remain around their midlines, as the price struggles with a mild-bearish 20 SMA and below the larger ones.

Support levels: 1.0830 1.0790 1.0750

Resistance levels: 1.0925 1.0960 1.1000

Image sourced from Pixabay