- The dollar takes the lead in demand for shelters while fears of coronaviruses return.
- New York reported the largest one-day increase in the number of cases.
- EUR / USD has reduced gains seen on Tuesday and may fall further.
EUR / USD flashes red as it heads towards the opening of London, marking a weak following Tuesday’s 0.92% rise from 1.08 to 1.0926.
The pair is trading at 1.0860 at the time of publication, which represents a drop of 0.28% on the day.
US dollar found deals in Asia as S&P 500 futures fell 0.5%, signaling risk aversion after New York reported 731 coronavirus deaths on Monday, the largest daily peak . At the same time, the daily death toll from coronavirus in Spain also increased for the first time in five days.
Risk sentiment also weakened after the rating agency Standard and Poor’s downgraded the country’s AAA rating, citing the recent deterioration in fiscal parameters.
The decline in EUR / USD is likely to accelerate if European stocks open on a negative note in response to new concerns about the virus. Traders should note, however, that the oil benchmarks are flashing green and may bode well for stocks, in which case the safe haven demand for the dollar is likely to weaken.
The European data register is thin, while on the other side of the pond, the minutes of the March meeting of the Federal Reserve are scheduled for 6:00 p.m. GMT.
From a technical point of view, the immediate bias would remain bearish as long as the downward trend line of the hourly graph drawn from the day’s peaks is intact. At the time of writing, the trend line barrier stands at 1.0888. A break above this level would mean a continuation of the rally from the April 6 low at 1.0768 and open the doors to the 200-hour average at 1.0932.