EUR/USD remains trading sideways with downside attempts contained at 1.1200

• EUR/USD reversal from 1.1238 has been contained at 1.1190.
• The negative risk sentiment amid rising COVID-19 infections is hurting the euro.
• ECB’s commitment to supporting Eurozone recovery has offered support to the EUR.

The euro has found buyers at 1.1200 area, after pulling back from 1.1238 earlier during the US trading sessions, which keeps the pair trading without a clear direction. The common currency has been consolidating within a tight range above 1.1200 over the last sessions after retreating from 1.1345 highs earlier this week, as risk sentiment deteriorated amid the rising numbers of coronavirus cases.

The euro suffers on fears of a second COVID-19 wave

Market fears about a second round of restrictions amid the global increment of coronavirus cases have dampened hopes of a quick economic recovery that has crushed risk appetite. Against this backdrop, investors’ rush for safety has boosted demand for the US dollar in regards to its reserve currency status, in detriment of riskier assets like the euro.

The common currency, however has been supported by the ECB’s commitment to support post-pandemic recovery. The Bank’s minutes defended the effectiveness of the Bond’s Purchasing Program, which was incremented in June 4 by 600 billion euros to 1.35 trillion euros, against the concerns of the German Constitutional Court, which ruled against ECB’s QE program in May.

EUR/USD: trapped between 1.1190 and 1.1240

The euro remains trading sideways between 1.1190 and 1.1240. On the downside, below session lows at 1.1190, the pair would test June 19 lows at 1.1175 and then June 1 low at 1.1100. On the upside, above 1.1240 session highs, the pair might find resistance at 1.1280 (intra-day resistance) and 1.1325 (Jun 24 high).

EUR/USD key levels to watch