EUR/USD looks to test 1.0800 ahead of German ZEW

• EUR/USD hits a new 34-month low at 1.0823 in early Asia.
• Corrective bounce to remain limited, as technical set up favors bears.
• Focus on German ZEW, coronavirus updates for fresh impetus.

Despite the latest recovery attempt from a new 34-month of 1.0823 reached in early Asia, the sentiment around the EUR/USD pair remains undermined by the German economic growth concerns and broad-based US dollar strength.

King dollar rules the roost 

The US dollar clocked a fresh four-month high across its main competitors at 99.24 earlier today after a renewed risk-aversion wave gripped the Asian markets amid rising concerns over the economic fallout of the China coronavirus globally. The greenback’s haven demand was boosted after Apple Inc. warned about its slowdown in production and weakened demand in China due to the virus outbreak.

On the EUR-side of the story, the shared currency continues to remain weighed down by mounting fears of a recession in Germany. Meanwhile, the German central bank, Bundesbank, reported in its monthly report on Monday, the economic growth will likely remain weak in the first quarter of 2020. This further added to the bearish sentiment seen around the euro.

In the day ahead, the spot remains exposed to further downside risks, as the German ZEW Economic Sentiment is expected to worsen to 21.5 in February vs. 26.7 reported in January. Further, EUR/USD’s near-term technical outlook also paints a bearish picture, with a test of the psychological support at 1.0800 on the cards.

EUR/USD Technical levels to consider