EURUSD has rallied by just over 50 pips from the intraday low in posting a high at 1.1882. This swings yesterday’s six-day peak at 1.1901 back into scope.


Dollar weakness is driving the move, which is being facilitated by strong gains in Cable (0.6%) and in the AUDUSD and NZDUSD (both 0.5%). USDJPY touched the key psychological 105.00, S2 and new seven-week low from a pivot yesterday at 105.50 and highs last week of 106.38.


Regarding the FOMC, no changes are expected in policy, and while the central bank will likely present upward revisions to US economic projections, the recently codified lower-for-longer monetary policy regime is driving a bearish dollar sentiment. The Dollar is also correlating inversely with global stock markets. These factors appear to be outweighing recent ECB signalling about its concerns about euro strength, which partly counterbalances the easing measures implemented earlier in the year. The Pound has rallied to six-day highs against both the Dollar and Euro.


Cable‘s high is 1.2976. The gains in the UK currency have been concurrent with market narratives showing a measure of incredulity about the UK government’s insistence that it is serious about its threat to leave the EU’s single market at year-end without a new trade deal, given the massive near-term disruptive impact it would have on the economy and the divisions appearing within the Conservative Party and among UK nations. Even though the controversial Internal Market Bill sailed through the House of Commons, the proposed legislation is likely to have a tougher time in the House of Lords, and in any case there are suspicions that the legislation is merely a gambit of PM Johnson and his cabinet to up the ante and strengthen their negotiating position into the final weeks of talks. This fits with expectations that a more practical attitude will be seen in trade negotiations once state leaders become directly involved in the run-in to the October 15th-16th EU summit. This backdrop has lessened the bearish conviction markets have with regard to the Pound.

Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD challenges weekly lows after mixed Durable Goods Orders

US Durable Goods Orders were up a measly 0.4% in August, missing expectations of 1.0%, although Nondefense Capital Goods Orders ex Aircraft jumped 1.8%. Equities bounce from lows, but the dollar maintains its strength.


GBP/USD loses 1.2700 as the dollar keeps rallying

GBP/USD approaches its weekly low at 1.2674 as demand for the American currency extends into the final trading session of the week. Hopes for a UK trade deal with the EU doing little for Sterling.


Gold: Finally some rest bite as XAU/USD holds at $1865 per ounce

It has not been the best week for the gold bugs as the yellow metal has fallen 4.36% since Monday. At the end of the week, the price has started to consolidate at the USD 1865 per ounce area. 

Gold News

Breaking: ​​​​​​​The IRS makes it hard to pretend you don’t have Bitcoin

The cryptocurrency holders might have a hard time trying to hide their Bitcoins or other digital assets. IRS considers changing the standard 1040 form by including a bold question on the front page:  At any time during 2020, did you sell, receive, send, exchange, or otherwise acquire any financial interest in any virtual currency? 

Read more

WTI moves back to flat and once again trades above $40 per barrel

It has been a mixed Friday for WTI as the price is moving sideways heading into the weekend. All of the excitement was last week when the OPEC+ JMMC decided to keep output levels at their current rate until December.

Oil News

Forex Majors