The Euro underperformed against the overall weaker US Dollar, finishing with modest gains at 1.0840 from Friday’s 1.0830. Trading was subdued with an overnight low recorded at 1.0815. EUR/USD bounced from there on the broad-based Greenback softness to 1.0876 before slipping to 1.0840 in late New York. Despite the market’s brighter risk sentiment on easing restrictions as countries start to reopen, the Euro struggled to gain ground against the Greenback.
Apart from a speculative long market positioning, the drama involving Germany’s high court ruling on the ECB’s bond buying program weighs on the shared currency. The ruling cast a shadow on the ECB’s plan to support the economy, ravaged by the coronavirus outbreak. Uncertainty over EU stability also weighs on the Euro.
EUR/USD has immediate resistance at 1.0880 followed by 1.0910. Immediate support can be found at 1.0800 and 1.0770. Until we see a shake-out of the speculative Euro long positions, any sustained EUR/USD rally will be sold into. Look for a likely range today of 1.0780-1.0880. Prefer to sell rallies, the shared currency is not out of the woods yet.