EUR/USD: Risk-off fuels recovery, ECB eyed

• EUR/USD is back above 1.13 amid risk-off mood in the global markets. 
• Trump's coronavirus speech fell short of expectations and strengthened the demand for safe havens. 
• With rates already below zero, the ECB has little room to deliver aggressive stimulus.

Risk aversion is again boding well for the single currency. 

EUR/USD pair is currently trading at 1.1317, representing a 0.42% gain on the day, while the Asian stocks, oil, and the S&P 500 futures are reporting sharp losses. 

The pair jumped from 1.1266 to 1.1334 in the 60 minutes to 02:00 GMT as the risk aversion in the stock markets worsened after President Trump failed to quell fears about a prolonged virus-led slowdown in the domestic and global economy. 

In his address to the nation at 01:00 GMT, Trump announced a 30-day travel ban on visitors from most of Europe and called on Congress to offer immediate payroll tax relief. Investors, however, were expecting stronger stimulus measures and sold risk aggressively following Trump's speech, boosting demand for safe havens like JPY, EUR and the US treasuries. 

With risk-off in full swing, the EUR/USD pair could continue to trade better bid in the run-up to the European Central Bank (ECB) rate decision, scheduled at 12:45 GMT. 

Focus on ECB

The central bank is stuck between a rock, a hard place, and the coronavirus and has limited scope to act, as noted by FXStreet's Yohay Elam. 

The rates are already below zero. As a result, any cut is unlikely to have a (positive) impact on the economy and may not yield a sustained weakness in the EUR. 

That said, markets are anticipating a cut in the deposit rate, which currently stands at -0.5%. Hence, the EUR could see a sharp rise if the central bank keeps rates unchanged. 

Technical levels