EUR/USD Price Analysis: Back above 1.085, falling wedge seen on 1H chart

• EUR/USD trims losses as US stock futures rally on hope of coronavirus treatment.
• A falling wedge breakout on the hourly chart would open the doors for a re-test of recent highs. 

EUR/USD is currently trading near 1.0860, having hit a low of 1.0817 during Thursday’s US trading hours. 

The spot found bids near 1.0832 three hours ago and jumped to a high of 1.0867, as the S&P 500 futures rallied, yielding broad-based losses for the US dollar, possibly in response to the headline from STAT news that Gilead Sciences’ experimental drug remdesivir is seeing rapid recoveries in fever and respiratory symptoms associated with the coronavirus. 

Despite the recovery from 1.0817, the pair is still trapped inside a falling wedge pattern, which comprises descending converging trendlines connecting lower highs and lower lows. The converging nature of trendlines is indicative of a weakening of downward momentum. Hence, a breakout is considered a bullish reversal confirmation. 

A move above the top end of the wedge at 1.0870 would confirm wedge breakout and shift risk in favor of a re-test of the April 14 highs near 1.0990.  

Alternatively, a failure to keep gains above Thursday’s low of 1.0817 would invalidate the falling wedge and shift the focus to support at 1.0768 (April 6 low). 

Hourly chart

Trend: Neutral

Technical levels