- EUR/USD bulls in control at the start of this week in a risk-postive market place.
- All eyes will now turn to a number of critical events, including the Fed and Nonfarm Payrolls.
EUR/USD remained elevated on Monday in a positive risk environment as traders picked up on the solid performances in global equities. It has been an otherwise relatively quiet start to what indeed should be an eventful week ahead.
EUR/USD was ending on Wall Street around its highs for the day having travelled from a low of 1.1076 to a high of 1.1106, ending some 0.20% higher on the day. Corporate earnings are a focal point this week with 162 S&P 500 companies due to release quarterly financial results - The S&P 500 index surpassed its previous intraday all-time high which lent support to the euro while the EU granting the UK a Brexit extension until 31 January also helped to bring about some risk appetite.
As for the data for the day, there was little to go on at the start of the week, with just a 0.3% month-on-month fall in September wholesale inventories undershooting expectations of a 0.2% gain, while from the euro area, we had some mixed messages in money supply coming in slightly below expectations with a5.5% year-on-year rise in M3. Meanwhile, looking head and besides Brexit politics and central banks, this week brings a handful of data releases, including US and euro area Q3 GDP, euro area inflation, various ISM/PMIs, and US non-farm payrolls sure to shake things up for the single currency.
Eyes on the Fed
Commenting on the Federal Open Market Committee, (FOMC), for this week, analysts at TD Securities explained that they are expecting the Fed to lower rates by 25bp, delivering the third consecutive rate cut since July. "The FOMC is likely to communicate patience in deciding future policy moves after next week's cut as they assess the impact of the three cuts they have already delivered. We look for the Fed to temporarily pause before resuming rate cuts in Q1 2020."
From a technical standpoint, the single unit is struggling to get over a 23.6% retracement of its latest bullish run. Valeria Bednarik, the Chief Analyst at FXStreet notes that the 38.2% retracement of the same advance has been providing immediate support at 1.1065, adding:
"In the 4-hour chart, a bearish 20 SMA converges with the mentioned Fibonacci resistance, while technical indicators remain within negative levels, although lacking directional strength. The overall stance is negative, although little should be expected on this first day of the week."
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