Key Events for The Coming week
On Monday, September 28,
markets will tune in the ECB president Lagarde’s speech and the
Fed Mester’s speech at 10:PM (UAE time).
On Tuesday, September 29, eyes will be on the German inflation numbers for September,
the US consumer confidence index print, and the Fed Williams speech.
On Wednesday, September 30,
markets will follow the Chinses PMI numbers, the US Biden/Trump presidential
debate, the UK GDP Q2 final read, ECB Lagarde’s Speech, the German unemployment
numbers, the US GDP Q2 final read, the US oil inventories change, and the Fed
Kashkari’s speech.
On Thursday, October 1,
investors will find out about the Swiss inflation rate and September’s
manufacturing PMI final numbers for Switzerland, Germany, Eurozone, the UK, and
the US. The market also will know about the US ADP employment change for
September, the PCE price index for August, and the US initial jobless claims.
On Friday, October 2,
eyes will be on the Eurozone inflation rate for September, the ECB vice
President Guido’s speech, the US Non-Farm Payrolls with the unemployment rates
for September, and the Michigan consumer sentiment index read.
Next week, the EU/UK negotiations will resume yet
with lower
chances to strike a free trade deal, as the UK government
does not seem to be keen on signing a deal at any price, while the EU may take
legal action in response to the internal market bill.
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EUR/USD Daily Price Chart ( July 9 - September 27, 2020 )
Chart Source: Webtrader, Capex.com
Last week, EUR/USD failed to
overtake the bullish trendline originated from the August 3 low at 1.1694 and closed
below the 50-day moving average generating a bearish signal. On Friday, the
price closed above the low end of the current 1.1621- 1.1713 trading zone.
A daily close below the low
end of the zone at 1.1621 reflects a stronger bearish sentiment and may send
EURUSD towards the monthly support at 1.1459 (February 2019 high).
On the flip-side, a failure
in closing below the low end of the zone, signals bear's reluctance and could
reverse the pair’s direction towards the high end of the current trading zone
at 1.1713.
EUR/USD Four Hour Price Chart ( September 18- September 27, 2020 )
Chart Source: Webtrader, Capex.com
Last week, EUR/USD slipped to
the lower trading zone as discussed on the daily chart and started a downward
trend creating lower highs with lower lows.
To conclude, while the
bearish bias is still intact a break above 1.1661 changes the pair’s technical
outlook to neutral and may cause a rally towards the high end of the current
trading zone discussed above on the daily chart at 1.1713. On the other hand, a
break below the 1.1600 threshold could send EUR/USD even lower towards 1.1530.
As such, the support and resistance levels underlined on the chart should be
considered.