EUR/USD snaps four-day losing run, awaits convincing break above 1.12
- EUR/USD ended a four-day losing run on Monday and traded just below 1.12 during the Asian trading hours.
- Fed's easing likely drew bids for EUR/USD on Monday.
- Talks of aggressive fiscal stimulus may bode well for equities and draw offers for the single currency.
EUR/USD jumped 0.69% on Monday, marking an end of a four-day losing run which saw the spot fall from 1.1458 to 1.1055.
The Federal Reserve (Fed) delivered an emergence rate cut of 100 basis points and announced a quantitative easing in the form of at least $700 billion of asset purchases.
The central bank's aggressive stimulus overshadowed the turmoil in the Eurozone caused by the coronavirus outbreak drew offers for the greenback.
While EUR/USD defended key Fibonacci support at 1.1061 for the third straight day on Monday, the buyers failed to establish a strong foothold above 1.12.
A convincing break above that psychological resistance could remain elusive on Tuesday, as the S&P 500 futures are currently pointing to risk reset with 3.3% gains. If the equities in Europe and the US pick up a bid, the haven demand for the single currency will likely weaken.
The dollar may also draw bids fiscal stimulus talks. "The coronavirus relief package awaiting a Senate vote should not be delayed, and we must pass it immediately," Senator Elizabeth Warren from Massachusetts noted in her opinion piece for CNN.
Meanwhile, Treasury Secretary Steven Mnuchin said on Monday after a meeting with Senate Republicans that he was seeking a "big number" for an additional stimulus package intended to prop up the economy amid the coronavirus outbreak.
On the data front, the focus will be on the German Zew Survey for March scheduled for release at 10:00 GMT. During the American session, the spotlight will be on the US Retail Sales due at 12:30 GMT.
Technical levels