EURUSD stalls in its retreat from 1.1000

<h3>EURUSD, H1</h3>
<p>EURUSD has ebbed below its Friday lows in reaching a <strong>1.0923</strong> nadir, (3 pips shy of T2 on the Crossing EMA Strategy from earlier today) retracing some of the gains seen from the April-24th low at <strong>1.0726</strong>. Recent gains had been fuelled by a rotation lower in the Dollar, which had been concomitant with a risk-on vibe in global markets, underpinned by the shift to reopening from lockdowns in many economies. Increasing tensions between the US and China, with the former blaming the coronavirus pandemic on the latter and threatening to take measures, including fresh tariffs, have fostered a new phase of risk aversion in global markets, which in turn is now underpinning the Dollar against most other currencies, including the Euro. EURUSD remains to the south of the halfway mark of the volatile range that was seen during the height of the global market panic in March, which was marked by <strong>1.0635</strong> on the downside and <strong>1.1495</strong> on the upside. Expectations are that the pair <strong>will lack sustained directional bias for now, with range trading dominating trend following</strong>. Both the ECB and the Fed are pursuing aggressive easing policies, both Europe and the US are facing significant economic headwinds from virus-containing lockdown measures, and both Europe and the US are now pursing economic reopening strategies.</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/05/2020-05-04_14-48-07.jpg"><img class=" wp-image-128511 aligncenter" src="https://analysis.hotforex.com/wp-content/uploads/2020/05/2020-05-04_14-48-07-300×240.jpg" alt="" width="567" height="453" srcset="/wp-content/uploads/2020/05/2020-05-04_14-48-07-300×240.jpg 300w, /wp-content/uploads/2020/05/2020-05-04_14-48-07-768×615.jpg 768w, /wp-content/uploads/2020/05/2020-05-04_14-48-07-524×420.jpg 524w, /wp-content/uploads/2020/05/2020-05-04_14-48-07.jpg 784w" sizes="(max-width: 567px) 100vw, 567px" /></a></p>
<p>Final Eurozone manufacturing PMI was revised to 33.4 in the final reading for April from 33.6 in the preliminary report and versus 44.5 in March. With lockdowns getting stricter in April the manufacturing sector increasingly felt the pain, although the dip in sentiment has not been as pronounced as in services, which will struggle for longer in the “new normal”. Markit reported that investment goods suffered the sharpest contraction but aggregate output also deteriorated at a record rate, as did new orders. As Eurozone countries slowly come out of lockdowns there is hope that April was the worst month, at least for manufacturing, but Markit warned that the recovery will likely be “frustratingly slow”. So no hope of a quick recovery, at least this year, despite substantial government support.</p>
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<p><strong>Stuart Cowell</strong></p>
<p><strong>Head Market Analyst</strong></p>
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