EUR/USD Forecast: Underpinned by rising equities

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1709

The dollar gave up early gains as the presidential race shows tight results.
The US ADP Survey indicated a slower-than-anticipated pace of job creation in October.
EUR/USD intrinsically bullish, needs to overcome the daily high at 1.1770.

The EUR/USD pair peaked at 1.1770 and then fell to 1.1602 during Asian trading hours and as the results of the US presidential election began arriving. The greenback is now under pressure and equities trimmed intraday losses as the presidential race tightens. Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin are yet to finalize counting ballots.

US elections overshadow everything else, although worth mention that Markit published the final versions of October Services PMIs, which were upwardly revised in most of the EU. The German index printed at 49.5 from 47.3, while the Union index improved from 46.2 to 46.9. As for the US, the country just released the ADP survey, which showed a slower than expected pace of job creation in October. The private sector added 365K new positions, far below the 650K expected and the previous 753K.

EUR/USD short-term technical outlook

The EUR/USD pair is at the upper half of its daily range, trading around 1.1710. The bullish potential for the pair would remain limited as long as it trades below 1.1770, the daily high. The 4-hour chart shows that the 100 and 200 SMA converge around the mentioned high, reinforcing the static resistance level. At the same time, it is trading above its 20 SMA, which retains a modest bullish slope. Technical indicators, in the mentioned time-frame, maintain their bullish slopes within positive levels.

Support levels: 1.1690 1.1645 1.1600

Resistance levels: 1.1770 1.1820 1.1870

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD off highs, back to 1.3620

GBP/USD remains slightly on the defensive at the end of the week, receding to the low 1.3600s after hitting fresh tops past 1.3670 earlier in the day. Cable’s correction comes after two daily gains in a row and amid a tepid advance in the Greenback, while poor UK data also accompany the downside.

EUR/USD treads water below 1.1700

EUR/USD now trades with modest losses around 1.1670 following another unsuccessful atempt to advance past 1.1700 the figure in a convincing fashion. The pair’s decline follows a maginal rebound in the US Dollar as market participants continue to assess recent US data as well as developments from the US bond market.

Gold trims gains, recedes to the sub-$4,600 area

Gold rapidly leaves behind Thursday’s inconclusive price action and advances markedly on Friday, briefly surpassing the $4,600 mark per troy ounce to hit three-month peaks. Meanwhile, the precious metal’s solid performance comes despite marginal gains in the buck coupled with another day of rising US Treasury yields across the curve.

Week ahead: Fed’s Jackson Hole and Nvidia earnings to dictate markets

The new Fed chair, Kevin Warsh, has made few public appearances since taking the central bank helm in May, yet he’s found it difficult to steer off controversy. Question marks about his relations with the President, Donald Trump, continue to swirl, while markets are still trying to make sense of his approach to monetary policy.

CFTC Report: Oil positioning rebounds; VIX and Yen exposure turn more bearish

The week in one sentence: Speculative positioning turned more constructive in the week to August 18. WTI recorded the largest increase, followed by a sharp narrowing in CAD net shorts. VIX and JPY positioning moved the other way, while Gold remained the clearest crowded long despite a softer spot price.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.