EUR/USD falls to session lows for the day at 1.0785
The dollar was initially trading slightly softer to start the new day but is recovering some ground as we see the euro stumble further after holding its ground earlier.
Despite the more positive risk mood to start the new week, the dollar hasn’t lost too much ground overall as it is still keeping a firm footing against the euro and emerging market currencies for the most part.
In the case of EUR/USD, the pair is still keeping a more bearish near-term bias and sellers are leaning on minor resistance around 1.0828-38 to keep the downside momentum going.
The slight drop now will bring into question support at around 1.0773-76 before potentially revisiting the 1.0700 handle next.
In my view, unless the technical bias in the pair starts shifting back towards favouring buyers again, the dollar should still remain somewhat underpinned despite the more positive risk mood to start the week.
That shift seems to be quite a stretch right now with the 100-hour MA (red line) resting near the 1.0900 handle currently.
From a fundamental perspective, the coronavirus case situations in Europe are at least getting better recently so that gives some hope that the economic damage may not get much worse from hereon.
However, the lockdown measures in place may still stay the course for quite some time so just be wary that if this extends into June or later then there may be more worrying signs for the euro still to come.