EUR/USD Rate Bounce Back After Optimistic Coronavirus Cure News

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Today, the EUR/USD is trading slightly above 1.13, a rebound from the previous lows. The Report by Gilead indicated that their drug, Remdesevir would significantly reduce deaths among coronavirus patients. The news about a possible cure, improved stocks and this was reflected on the dollar.

TECHNICAL OVERVIEW

USD

  • Initially, the EUR/USD had tested a new low, flirting with the 1.1250 marks, before it bounced back and it’s currently above 1.13, which is a new high.
  • The dollar continues to bounce back to reach the 1.1370 mark, ahead of last months high at around 1.1422.
  • While it holds the downside today at 1.1047, with the 200-day simple moving average, EUR/USD is still expected to make more gains.

“Wall Street traders never built America” this populist statement by the Democratic Presidential Candidate, Joe Biden, backed the safe-haven USD, but sent shivers down the investor’s backbones. With Joe Biden still leading the presidential race by a significant margin of 9 points, his statement that his regime will end the era of shareholder capitalism hasn’t helped.

Furthermore, the white house current occupant has not helped in any way either. And it’s highly likely that the current crisis will hurt his re-election chances. So far Trump has insisted that schools must reopen in the Fall and threatened to punish the states that will not oblige. However, the president’s eagerness to return to normal is a big contract with the quick deterioration in the US COVID-19 crisis.

Daily COVID-19 infections are still at the peak at about 60,000 and might be held back because of insufficient testing capability in many states. Hospitals and laboratories are struggling in Arizona and other states. Furthermore, the number of people dying from COVID-19 is still increasing, with around 1000 deaths every day.

COVID-19 METRICS

COVID-19 METRICS

These coronavirus infection figures might keep consumers at bay and could ultimately trigger more restrictions. Else, they could also halt the reopening that Trump is looking forward to. The existing gloomier possibilities are evident in the high-frequency data but are not published in the economic dailies. Essentially, the initial unemployment claims reduced to 1.314 million Americans, beating these expectations, as the continuing ones remain at 18 million Americans. However, these are still huge figures that need to be taken seriously, as indicated by EUR/USD Hits a New 2-Week High of 1.0950, Targets 1.1000.

It is expected that the USA product prices will without a doubt stabilizes, and the focus will be left on new COVID-19 figures, beginning in Florida. The same will continue across the United States. It might also be important to pay attention to the opinion polls.

Europe, COVID-19 seems to have been put under control and now the focus turns to the monetary policy. The Eurogroup has recently nominated Ireland’s prime minister to be its present. This is a great milestone towards coming up with effective policies to guide the Eurozone towards its economic recovery plan.

Nevertheless, the ECB present, Christine Lagarde, has cast some doubt regarding the EU summit to be held next week. The European Commission, supported by France and Germany included mutually funded grants to the tune of €500 billion. However, this is still controversial with the frugal four, including Sweden, Denmark, Netherlands, and Austria.

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