EUR/USD turns indecisive ahead of EU ministers’ meeting

• EUR/USD carved out an inside day candle on Wednesday. 
• European Union finance ministers are set to continue fiscals stimulus negotiations on Thursday. 
• ECB calls for 1.5 trillion euros in fiscal measures

EUR/USD is lacking a clear directional bias as the European Union finance ministers struggle to agree on a coronavirus economic rescue package. 

Inside day candle

The spot suffered moderate losses on Wednesday, as Spain reported the highest daily increase in coronavirus cases deaths in four days. Meanwhile, the European Central Bank (ECB) said they have obligation to keep rates low for a long period of time while leading Germany economic forecast institutes see the economy shrinking as much as 10% in the second quarter, as noted by BK Asset Management’s Kathy Lien. That likely added to bearish pressures around the single currency.

However, while the pair declined, it still traded well within Wednesday’s trading range on Monday, forming an inside day candlestick pattern on the daily chart, a sign of indecision in the market place.

Focus on EU meeting

Having failed in all-night talks to agree on the coronavirus stimulus package, the finance ministers of the European Union nations are scheduled to continue discussions on Thursday. 

“This is a crucial issue on which the European Union’s future is at stake,” Spanish Agriculture Minister Luis Planas said of the fraught talks on Wednesday, according to Reuters. 

The European Central Bank (ECB) has called for a fiscal stimulus worth 1.5 trillion euros. However, the EUR ministers have so far failed to deliver the stimulus reportedly due to a persistent stand-off between southern European states like Italy and fiscally conservative states like the Netherlands. 

The single currency will likely take a beating if talks again end on a sour note. It’s worth noting that the ECB is already running a negative interest rate policy and a massive asset purchase program. As a result, markets are increasingly expecting governments to do their bit by providing fiscal stimulus. 

The ECB minutes, due at 11:30 GMT, are likely to reiterate downside risks to the economy and willingness to do more if required. On the data front, Germany is set to report trade figures for the month of February at 07:00 GMT. 

Technical levels