Euro prospects amid coronavirus

As expected, the coronavirus began to spread outside of China, capturing ever larger territories and infecting an increasing number of people.

A new source of spread has occurred in Europe, namely in Italy, where the number of infected people is growing rapidly.

Unsuccessful attempts to isolate cities in which the virus was discovered have not yielded much results, and reports of cases are already beginning to arrive from other European countries.

In Italy itself, store shelves are empty, schools and universities are closed for quarantine, and public events are cancelled.

People are starting to leave home less, use transport, and shop less. In fact, the Chinese scenario will be repeated.

Accordingly, it can be assumed that the consequences of the coronavirus in Europe will have the same negative impact on the economy as it did in China.

That is, one should not expect anything good for the European currency Euro, which has already begun to fall against the US dollar:

It is assumed that this trend will continue until the epidemic subsides or an effective means of combating the disease is found.

True, another scenario is likely: if the coronavirus moves overseas and covers the United States, panic on the stock exchanges and economic recession will cause a weakening of the American dollar.

Therefore, when opening trades to sell the EURUSD currency pair, you should be prepared to close the trade when bad news arrives from the United States.

The most likely forecast is that the euro will drop in price to $1.06 per euro, and then everything will depend on the situation in the United States itself.

In general, the situation in the markets is quite complicated, most investors are focused on selling, prices for securities and energy resources are falling, only shares of pharmaceutical companies can rise in price, and even then, not all of them.