Resurgence of Covid-19 May Hamper EUR

WikiFX News (27 Oct.) - Recently, the increasing infections of the coronavirus in Europe are threatening the bloc's economic recovery. The European Central Bank (ECB) is under the pressure of launching more policies to support the economy, which may weigh on the euro.

It is reported that France registered over 50,000 new cases yesterday. Meanwhile, Germany announced that it would introduce new restrictions for those municipalities deemed as at high risks of infection.

Besides, the latest economic data begins to show the negative impact of restrictions. Euro-zone services PMI fell to 46.2 in October, undershooting market expectations of 47, while all three mobility metrics (walking, driving, and transit) continue to slide lower.

The coronavirus developments in the bloc will likely influence the euro's trajectory ahead of the ECB's monetary policy meeting on October 29, heaping pressure on the ECB to launch more monetary policies to support the economy and in turn capping the euro.

EUR/USD remains skewed to the downside since the RSI failed to climb above 60 and get into bullish territory.

EUR/JPY may extend its decline from the yearly high of 127.07 as the price failed to breach the psychological resistance of 125.

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Chart: Trend of three mobility metrics