The EURUSD pair locked in gains on Monday, September 28. The single currency moved 0.31% higher against the US dollar to close at 1.1664. The rally also stoked upside in the British pound after BoE Deputy Governor Dave Ramsden talked about negative rates. He said that the Central Bank does not intend to resort to negative rates anytime in the near future. These remarks came on the heels of remarks made last week by head of the Bank of England, Andrew Bailey. In the upshot, cable popped 1.32% to 1.2929, while the single currency advanced 0.5% to 1.1680.
US equity benchmarks rose from 1.51% to 1.91% on the day. US House Speaker Nancy Pelosi said talks on a new stimulus package are ongoing. Moreover, gains were driven by positive data out of China. The profit of companies in the industrial sector climbed for the fourth month in a row. Despite outperformance by the indices, key dollar pairs trended sideways throughout the North American session.
Today’s macro agenda (GMT+3)
In Asia, major currencies are trading in positive territory, with the exception of the Canadian dollar and the yen. The EURUSD pair rose to the level of 1.1684. Strong resistance has formed at 1.1685 over the past 10 days. Gains this morning are supported by an advance in US equity futures.
On the chart with a 1H period, a reversal pattern has shaped up, portending the extension of upside. Looking at the price pattern from the top of 1.1680, i.e. a narrowing formation, a breakout to the downside down to 1.1650 looks quite likely. A breakout from the 1.1685 level would accelerate upside in the pair to 1.1710/20.
The coronavirus pandemic continues to wreak havoc across the eurozone. Yesterday, German Chancellor Angela Merkel voiced concerns about the coronavirus infection rate in the country. For this reason, yesterday's upturn in cable might fizzle out. For a deep correction, buyers will need to defend the 1.1645 level, as a breakout from there would pave the way for sellers to reach the September 25 low of 1.1612.
A raft of FOMC speeches will be delivered during today’s US trading session. The Fed meeting is over, so their statements are unlikely to dispel negativity surrounding the second wave of the pandemic.
Americans and Europeans eagerly await a safe and effective vaccine to protect against the virus. Pfizer has emerged as the unrivaled leader in the Covid-19 vaccine race. Pfizer and its partner BioNTech expect to report the first late vaccine trial results by the end of next month.