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EUR/USD refreshes 35-month low under 1.0650 as sellers take clues from the US senate

  • EUR/USD remains under pressure amid broad US dollar strength.
  • The US Senate fails to pass the COVID-19 Bill, coronavirus fears loom.
  • ECB policymaker signals Eurobond to combat the virus.
  • US stock futures dropped to the “limit down”.

Having recently dropped to the lowest since April 2017, EUR/USD makes rounds to 1.0670, down 0.26%, amid the Asian session on Monday.  The pair takes clues from the US dollar’s broad strength following the Senate’s failure to pass the COVID-19 bill.

The US Senate fails to pass even the first barrier of its much-awaited stimulus package, estimated around $2.0 trillion, as opposition Democrats show the sign to renegotiate the key bill with the ruling Republicans.

Earlier during the day, US President Donald Trump indicated to sign the Bill, if crossed the Senate, by the end of the day. The Republican leader’s failure to provide the stimulus initially triggered the risk-off.

Also contributing to the market’s fears could be the rising coronavirus numbers from the US and Italy. Additionally, the widespread outbreak in Asia, as well as the West, seem to push markets towards rush to hoard the US dollar.

It’s worth mentioning that Luis de Guindos is Vice-President of the European Central Bank (ECB) earlier suggested the EU should consider Eurobonds to fight against the coronavirus (COVID-19).

On the contrary, the St. Louis Federal Reserve President James Bullard anticipated the second quarter (Q2) GDP to shrink by 50% in addition to the surge in Unemployment Rate to 30% due to the pandemic.

While portraying the risk-off, the US equity futures tanked to the “limit down” during the initial open while taking rounds to more than 4.0% loss by the press time.

Looking forward, markets will keep eyes on the headlines from the US for immediate direction while the virus news will also be important to watch.

Technical Analysis

April 2017 low near 1.0570 is likely immediate support ahead of the year 2017 bottom surrounding 1.0340. On the upside, February month low around 1.0780 acts as the immediate resistance.

 

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