EUR/USD Bulls Shy Away from Key Resistance Level, What Moves Markets?

By: Miguel A. Rodriguez

11:10, 08 October 2020

1602143242.jpg
Equities rally on US elections poll’s and the Federal Reserve members express concerns. What is the outlook of FX, and commodities markets today?

Equities 

On Wednesday global stocks rallied on hopes of a Democratic victory in the US elections could mean more federal spending to boost the economy, as the recent polls have favored the Democratic candidate Joe Biden against President Trump. 


The Federal reserve minutes reflected member’s concerns about the delay in passing the new fiscal spending bill and hinted that the central bank may consider increasing its current bond purchasing program. Members have agreed that the US economy’s recovery would be dependent on the coronavirus course, and according to the Fed member Evans, investors still believe that the Fed would not change the interest rate until reaching full employment and inflation seem to overshoot its 2.0% target which may take years. 

  Stock Market

Change %

S&P 500

+2.0%

Dow Jones

+2.1%

NASDQ

+2.1%

Japan 225

+0.9%

DAX 30

+1.3%

FTSE 100

+0.8 %

CAC 40

+0.9%


Currencies 

The greenback slipped on Wednesday by 0.2% yet the bullish uptrend still intact while above the neckline of the inverted head and shoulders pattern located on Thursday at 93.33. Therefore, a daily close above 94.04 could send the US Dollar index towards 95.24. 

On the other hand, the EUR/USD rallied on Wednesday however, remained below the 50-day moving average highlighting the bull's weakness. A close below 1.1713 could send the pair towards 1.1621.

The GBP/USD has benefited from the US dollar retreat and tested this week the 1.3000 level for the first time in three weeks. However, the EU/UK negotiations updates next week could weigh heavily on the British pound as the UK may pull out of the talks if there was no clear deal in sight.  

Commodities 

The oil price rallied on Wednesday as US inventories numbers showed a big drop from 1.78 M to 0.47M. However, the surge in COVID-19 infections in New York (three months high) kept the rally in check. The Brent oil remained around $42.50 yet a failure to close above that level could reverse the price direction towards $39.60 while the US Crude may fall towards $38.37 while below the 50-day moving average. 

The Gold price failed to close above $1,921 and pointed lower this week. The precious metal could resume bearish price action if closes below $1,861. 

Looking Ahead 

The ECB monetary policy meeting accounts will be released at 12:30 PM (GMT) and by 1:30 PM eyes will be on the US initial jobless claims, then the Fed member Barkin will deliver a speech at 7:30 PM. 


Share this article

The information presented herein is prepared by CAPEX.com/eu and does not intend to constitute Investment Advice. The information herein is provided as a general marketing communication for information purposes only and as such it has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.                                                                                                                            Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience, or current financial situation.Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance and forecasts are not reliable indicators of future results.