EURUSD gained traction on its bounce off the range support visible on the 4-hour time frame, and price is closing in on the resistance near the 1.1000 major psychological mark.

Price also seems to have broken above a short-term triple bottom pattern, confirming that a climb is due. The reversal pattern spans around 150 pips in height, so the resulting climb could be of the same size.

However, the 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to gain traction. Then again, price has broken above both moving averages, so these could hold as dynamic support levels from here.

RSI is already indicating overbought conditions or exhaustion among buyers, so turning lower could signal that sellers are returning. Stochastic has also reached the overbought region to show that buyers could use a break and might let sellers take over.

The euro is enjoying strong upside pressure on account of the reconstruction plan proposed by Germany and France. The largest nations in the region called for a 500 billion EUR fund to combat the economic impact of the COVID-19 pandemic, offering grants to the hardest-hit sectors in hopes of reviving growth.

This was announced by a joint statement from France’s Macron and Germany’s Merkel, who were proposing to authorise the European Commission to borrow money on financial markets in the EU’s name. However, this would have to be approved by 27 member nations to push through.

Other catalysts to watch out for include the release of the euro zone PMIs later in the week as these leading indicators would provide clues on how business and consumer activity might fare. Apart from that, more updates on the development of a coronavirus vaccine could also lift risk sentiment.