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Coronavirus risks intensified again over the weekend, leaving FX markets with a distinct risk-off tone at the start of the week. Analysts at TD Securities analyze the EUR/USD pair outlook.

Key quotes

“With a fairly light data and event risk calendar, we expect the outbreak to remain the key sentiment driver this week.”

“The uptick of cases in Italy keeps downside risks in view for EUR/USD, but spot is already oversold, suggesting some further consolidation may be necessary.”

“We like selling EUR/USD on rallies from here and think a squeeze towards 1.10 would offer an attractive entry point for shorts. Ahead of this, 1.0879 remains the key attractor to the upside.”