Euro and US Dollar Brace for Key Events

October 26, 2020

Pound Hush up Depen&t happening EU and Britain Trade Deal Negotiations.

by Bog& Giulvezan

Sentiment towards the greenback remained instead neutralized over the past workweek, As investors and traders took a cautious glide path to the markets, mostly delinquent to USA fiscal stimulus talks and the future of the Presidential election.

On the other side of the pool, there's increased hope that the European Coupling and the United Kingdom may still stretch a trade deal, although the first deadline (October 15) did non bring finality to the issue. Unpredictability in Lebanese pound pairs is likely to rise during the week, as EU and UK negotiators wish try to iron extinct a mete out before the new deadline: middle-November.

Friction over fisheries remains a main component of the negotiations and British Premier Boris Johnson has warned businesses that they should get ripe for a no-deal consequence. However, France, World Health Organization antecedently had a strong position against compromising on fisheries, reportedly announced that an arrangement on the count may live reached. Furthermore, UK Trade Secretary Liz Bind mentioned that the UK and the EU are "making good progress on the negotiations", thus it's fair to assume that such positive developments whitethorn press the Pound (and possibly the Euro) higher.

As for the Euro, the European Central Bank will announce the rate of interest this Th and although no alteration is expected, the ECB Press Conference and President Lagarde's speech will likely influence the longer-term outlook.

Key Events for the Week Ahead

Although few moderate-impact releases are scheduled throughout the week, Th, October 29 volition be the most noteworthy day of the week, with two major events. The US quarterly Advance Gross Home Product (GDP) comes out at 1:30 pm GMT and is due to mail a figure of 32%, following the major contraction of -31.4 seen in the former period. Since the GDP is the main approximate of an economy's wellness, a greater number wish prove salutary for the currency and usually, the affect is significant.

The Lapp day, at 1:45 phase modulation GMT, the ECB volition announce the Main Refinancing Grade (not potential to change from the current 0.0%) alongside a Monetary Policy Statement and followed at 2:30 pm GMT away a speech delivered past ECB President Lagarde. The language is usually the "main attraction" but likewise the clock time when the Euro sees the most natural action, contingent on the topics discussed aside the ECB President and her tone.

Chart Analysis – EUR/USD

Closing calendar week the Euro posted solid gains against the greenback but it seems the latter is fashioning a counter, at any rate in the shortsighted terminus. The pair is currently trading near 1.1800, above the support at 1.1750, and above a bullish movement line drawn on a Daily chart.

We may very well see a range-bound market until Thursday when both currencies in the span will be affected by stellar events, thus a strong breakout is less likely. The MACD is climbing but lacks momentum and the Stochastic doesn't show an extreme condition (overbought or oversold), supporting the idea that we will probably have a larghetto mate of days. The levels to watch continue 1.1750 followed by 1.1615 to the downside and 1.2000 to the top side. As longsighted as the brace remains higher up the trend line, the bias is timidly optimistic.