EUR/USD rallied on Friday, extending its gains before reversing in early trading. Yesterday’s up move can be largely attributed to the weak dollar, which lost ground against major currencies after the shocking US jobless claims figures were released.
The US Labor Department reported on Thursday that weekly unemployment claims reached 3.28 million, over four times the prior record of 695,000 jobless claims in October 1982. The news sent chills through the markets as analysts had widely expected that claims would come in closer to 1 million. Sentiment improved after Federal Reserve Chairman Jerome Powell made an appearance on NBC’s Today Show. He reassured investors that the central bank has further tools at its disposal to address the fallout from the coronavirus pandemic, stating: “When it comes to this lending we’re not going to run out of ammunition, that doesn’t happen.”
Data from Johns Hopkins University shows that the number of Coronavirus COVID-19 global cases has risen to 537,808 with 24,127 fatalities at the time of this writing. While the United States now has the largest number of confirmed cases, Italy and Spain have suffered the greatest number of lost lives to date. On Friday, US president Donald Trump and Chinese president Xi Jinping spoke on the phone to discuss the pandemic. Trump later tweeted: “Just finished a very good conversation with President Xi of China. Discussed in great detail the CoronaVirus that is ravaging large parts of our Planet. China has been through much & has developed a strong understanding of the Virus. We are working closely together. Much respect!”
Looking at the EUR/USD daily chart we can see that price retraced to the ‘line in the sand’ 200-period moving average before reversing. Major support lies at the prior low of 106.38 and resistance sits above at the 1.1236 level. Investors eye the latest coronavirus headlines, after British Prime Minister Boris Johnson tweeted on Friday that he has tested positive.