EUR/USD challenges resistance zone as President Trump signs stimulus

• EUR/USD trades at 1.2215 versus 1.2179 in early Asia. 
• President Trump signs the coronavirus package, sending the dollar lower.
• The EUR bulls need to establish a foothold above 1.22.

EUR/USD is better bid and challenging critical resistance zone on Monday, with the safe-haven dollar nursing across-the-board losses on President Trump’s decision to sign the much-needed coronavirus relief package. 

The currency pair is currently trading near 1.2215, representing a nearly 0.30% gain on the day. The upside was capped in the zone of 1.2215-1.2221 in the previous two trading days. 

Trump signed a $2.3 trillion package late Sunday, combining Covid-19 relief with government funding, restoring enhanced unemployment assistance that expired Sunday, and authorizing $600 in direct payments to Americans.

Trump had opposed the package last week, demanding larger relief checks and scaled-back spending. His sudden change of heart seems to have caught markets off guard and looks to be drawing offers for the greenback. The Brexit deal reached last week has also cleared the way for a continued rally in EUR/USD. 

It remains to be seen if the pair can establish a foothold above 1.22, having failed to do so in the previous two trading days. The data calendar is light on Monday, and erratic moves could be seen due to holiday-thinned trading.

Technical levels