• Forex
  • Investments
  • Loyalty program
  • Promotions and contests
  • Analysis
  • Getting started
  • About us

EURUSD: buyers looking to muster upward correction

The EURUSD pair extended losses on Thursday, October 29, plunging 0.62% to 1.1673 and off an intraday low of 1.1650. The main downside driver was the deteriorating epidemiological situation across Europe alongside the imposition of new lockdowns in Germany and France.

The single currency came under additional pressure from ECB President Christine Lagarde’s remarks and US macro releases. At yesterday’s press conference, Lagarde held out the possibility of further monetary policy easing in December.

According to the preliminary estimate, US GDP surged 33.1% in 3Q after contracting 31.4% in Q2 (vs. the 31% forecast). The labor market report showed that 751,000 people applied for unemployment benefits in the week ended October 24, down from 791,000 in the previous period. The reading turned out to be better than expected.

The euro rebounded from 1.1650 to 1.1678 after the close of trading in Europe.

Todays macro data (GMT+3)

10:45 France: household consumption (September)

11:00 Switzerland: KOF leading indicator index (October)

13:00 Eurozone: GDP (Q3) and unemployment rate (September)

15:30 Canada: GDP (August), PPI (September); US: personal income/spending (September)

16:45 US: Chicago PMI (October);

17:00 US: Reuters/Michigan consumer sentiment (October)

20:00 US: weekly oil rig count

1

Current outlook

On Thursday, euro selling resumed at the opening of London trading and ended at the close of trading in Europe. The decline stopped near the D3 line (1% price deviation by from the 55-day MA) and the 180-degree angle (Gann levels). Initially, the price action recovered to 1.1678, and reached 1.1694 in Friday Asian trading.

The market has calmed down slightly and buyers are now gaining support from growth in the key EURGBP cross, which has hovered in the range of 0.9000-0.9150 for quite a long time. However, two cross pairs are trading in the red: EURJPY and EURCHF. The dollar is trading in the green against the Australian dollar, the Canadian dollar, the pound and the New Zealand dollar.

After the switch to winter time, the European session now opens at 11:00 Moscow time. For this reason, we could see some false pre-trade moves. Since the beginning of the week, the single currency is off about EUR 0.02 without any sharp pullbacks. There are no fundamental reasons for the price action to recover at this stage. That said, many market participants could take profit on short positions ahead of the weekend.

On the hourly timeframe, the downside risks still include a drop below 1.1650, as the price action rolls back slowly and US index futures fell by as much as 0.8% in early morning trading. If the Eurozone 3Q GDP report does not disappoint investors at 10:00 GDP, the key pair will likely close out the week at 1.1735/1.1740. If the annualized decline comes in at over 15%, then, on the contrary, the pressure can be expected to increase. 

On the daily timeframe, sellers have broken through the trendline. Now nothing prevents them from pushing the pair down to 1.1500. If Europe is unable to check the spread of the coronavirus, the euro will continue to decline against the dollar.  Pre-election volatility/uncertainty is also in the cards. According to the latest polls, Biden is still in the lead.

Latest reviews

Everyone has the chance to make a profit

You don't need to trade on your own to make a profit. Make a profit by entrusting your funds to experienced traders!

Register

There's a better website for you

A new exciting website with services that better suit your location has recently launched!

Sign up here to collect your 30% Welcome Bonus.