Forex traders are awaiting new measures from the European Central Bank leadership to accelerate the recovery of the weak Eurozone economy and comments by Bank Governor Christine Lagarde later in the day may have an opportunity to come up with signals about the timing and nature of these prospective measures. As for the price of the EUR/USD pair, it is still under strong downward pressure for the second consecutive week, and its losses reached the 1.0907 support, the lowest in four months, and is stable around that level at the time of writing. The strong US economy and investor appetite for it as a safe haven amid fears of the spread of Coronavirus support the continuation of the pair's downtrend.
According to the latest statistics, the outbreak of the Corona epidemic in Wuhan, China, a worrying ghost for health officials in many other places, with the number of infected people exceeding 40,000 with more than 1,000 announced dead. Officials are trying to reassure the public, while moving to ensure an adequate supply of medicines and other medical necessities. Many countries outside China that have a large number of cases, such as Japan, France, and the United States, have relatively sufficient resources to isolate and treat patients. Low-income countries such as Nepal, Sri Lanka and Cambodia have reported one case each.
In Wuhan, three large facilities have been converted into makeshift hospitals, providing 3,800 beds for patients with mild symptoms of the virus. State television reported that the city plans to transfer more facilities to hospitals for treatment and emergency checks. Two new hospitals have also been built, one with 1,000 beds and one with 1,500 beds.
On the economic level. Eurozone investor sentiment declined in February 2020, after rising in the previous three months, as investors worried about economic outlook amid the uncertainty caused by the outbreak of the Coronavirus in China. The Sentix Institute for Behavioral Research said that the investor confidence index fell to 5.2 from 7.6 in December. The survey's current status index fell to 4.0 from 5.5 and the forecast scale fell to 6.5 from 9.8.
Sentix's latest survey was conducted between February 6 and 8 among 1086 investors.
According to the technical analysis of the pair: As I mentioned before, I now confirm that the general trend of the EUR/USD pair is increasingly solidifying towards the downside and the nearest bear targets today are 1.0880 and 1.0800 respectively, from which it is possible to buy, as technical indicators have reached oversold areas awaiting bounce. Without the pair breaching the 1.1200 resistance, there will be no reversal of the current downtrend. If Lagarde does not offer anything new, the pessimistic outlook towards the European single currency may continue, and the US dollar will continue to reap more gains. After Lagarde's comments, the pair will be on a date with a reaction from Federal Reserve Governor Jerome Powell's testimony as he explains to the Congressional Committee the country's economic performance, the bank's future plans and ways to confront the consequences of the Coronavirus outbreak and its threat to global economic growth.
