- EUR / USD fell back under a major medium support.
- The dollar is a better offer at all levels thanks to the escalation of American-Chinese tensions.
- The proposed EU mutual fund and signs of a recovery in the German economy could limit losses in euros.
EUR / USD is facing selling pressure and is currently trading below the 100 day simple moving average (SMA) support at 1.0966.
The US dollar seems to be attracting offers of refuge, thanks to escalating tensions between the United States and China.
President Trump intensified his attack on China on Thursday evening by accusing the dragon nation of waging a massive disinformation campaign and allowing the coronavirus to spread around the world. In addition, the White House released a 20-page report to Congress, criticizing China’s economic and military policies.
Tensions between the world’s largest economies could keep risk feeling under pressure and the safe haven dollar offers better during trading hours in Europe. However, the optimistic mood of the recently announced European Union (EU) mutual fund proposal could limit losses in EUR / USD.
According to Reuters News, France and Germany have offered a stimulus fund of 500 billion euros ($ 543 billion) to offer and to the sectors most affected by the coronavirus pandemic.
This, coupled with recently released German survey data, which showed a larger than expected increase in inventors’ sentiment, pushed the EUR / USD up from 1.0919 to 1.10 on Wednesday.
From the point of view of technical analysis, the bias remains neutral, the pair remaining stuck in the four-week trading range from 1.10 to 1.0750.