The EURUSD has been under pressure in the Asian session, with selling pressure denting sentiment. The primary reason for the selling pressure was the strength of the US dollar, which has been supported by recent economic data from the US. Additionally, there are concerns about a potential recession in Europe, which has also contributed to the negative sentiment around the euro.
Recovery Since London Open
Despite the selling pressure in the Asian session, the EURUSD has recovered since the London open. The pair saw a 70 pip bounce, leaving it trading marginally up for the day around the 1.0850 handle at the time of writing.
Dollar Strength and Recessionary Fears
The primary reason for the selling pressure on the EURUSD is the strength of the US dollar. Recent economic data from the US has been positive, with strong job numbers and improving economic growth. This has led to increased demand for the US dollar and has put pressure on other currencies, including the euro.
Additionally, there are concerns about a potential recession in Europe. Economic growth in the Eurozone has been slowing, and there are fears that the region may be heading towards a recession. This has further weakened sentiment around the euro and contributed to the selling pressure on the EURUSD.
Impact of the Coronavirus
Another factor that may be contributing to the negative sentiment around the euro is the impact of the coronavirus outbreak. The virus has hit Europe hard, with several countries imposing lockdowns and travel restrictions. This has had a significant impact on the economy, and there are concerns that the outbreak could push the region into a recession.
Outlook for the EURUSD
The outlook for the EURUSD remains uncertain, with several factors contributing to the volatility in the currency pair. The strength of the US dollar and the potential for a recession in Europe are likely to continue to weigh on the euro. However, there are also factors that could support the euro, such as the European Central Bank’s monetary policy and the potential for fiscal stimulus in the region.
In conclusion, the EURUSD has faced selling pressure in the Asian session due to a combination of dollar strength and recessionary fears. However, the pair has recovered since the London open, trading marginally up for the day. The outlook for the EURUSD remains uncertain, with several factors contributing to the volatility in the currency pair. The strength of the US dollar and the potential for a recession in Europe are likely to continue to weigh on the euro, but there are also factors that could support the currency in the future
