EURUSD Watch Short Term Key Resistant at 10990

EUR/USD: Watch Short-Term Key Resistance at 1.0990

The Euro has posted a strong rebound against the U.S. dollar since marking a recent low at $1.0727 on April 24.

Latest official data showed that the eurozone's economy contracted 3.8% on quarter in the first quarter (as expected), the biggest contraction on record, reflecting the damage caused by shutting down major European economies for containing the coronavirus pandemic.

Also in the first quarter, France's GDP shrank 5.8% and Italy's was down 4.7%.

Meanwhile, the government of Germany, the biggest economy in the eurozone, projects the country's economy to contract 6.3% for the whole of 2020.

While the European Central Bank kept its key interest rates unchanged (deposit facility rate still in Negative region) yesterday (April 30), it reduced the interest rate on TLTRO operations, longer-term refinancing operations making loans to European banks.

The central bank added that it is "fully prepared" to increased the size of the pandemic emergency purchase programme by "as much as necessary and for as long as needed".

Though governments of Germany, France, Italy and Spain starting to ease pandemic-induced restrictions in an effort to get their economies back to normal, damage has been done and the duration required for those economies to return to "normal" remains a big question that is hard to answer.

On a Daily Chart, EUR/USD has to make a clear break above Key Resistance at 1.0990, which is around the previous high seen in mid-April, in order to bring about a Bullish Reversal.

Otherwise, the recent rebound only proves to be yet another unsustainable one.

Source: GAIN Capital, TradingView

On an Intraday 30-Minute Chart, technical configuration (20-period, 50-period moving averages, relative strength index) are still well directed as to favor a Bullish Bias.

Unless the Key Support at 1.0920 is breached, the level of 1.0970 (around the high of yesterday) remains an overhead resistance.

Over 1.0970, the next resistance level at 1.0990 (Key Resistance on Daily Chart) will come into sight.

Source: GAIN Capital, TradingView

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.