- EUR/USD without a direction.
- Trades flat at 1.1795, lost 0.78 Percent on Friday.
- The decline confirms a daily-chart bearish reversal.
EUR/USD suffered its largest single-day decline, since April 2, on Friday on the back of the dollar-rebound.
Dollar Selling Overdrawn
Morgan Stanley has turned Neutral on the dollar from the earlier bearish stand, as the greenback touched the most oversold levels in the last four decades, according to a Reuters report.
The dollar index – tracks the greenback against a basket of currencies, had touched 92.52 last week – a 26 year low on record—a far cry from the 102.99 in March. The index is now at 93.34, after a bounce off the multi-decade low.
Short-term technical measures like the 14-day relative strength index and slow stochastic are flashing oversold conditions. A bounce-back is expected on the currency with the global equities looking stretched in their current rally.
US Stimulus Progress
President Trump on Saturday went ahead with his promise of an executive order to circumvent the Congressional deadlock over the stimulus package. The executive-order provides for 400 dollars unemployment benefit per week; dollar 200 short of the earlier package which had expired recently.
Both Democrats and Republicans are willing to resume the stimulus package but had big differences over the deal terms. The US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have both indicated their readiness to resume stimulus negotiations.
JP Morgan has warned that the US economy will suffer from higher unemployment, lower consumer spending and GDP downgrades if the White House postpones negotiations to a later date after the Presidential Elections.