EUR/USD plummeted to 1.1615, its lowest level since late July. The pair has posted an interim top at 1.2011 and heads lower, with 1.1500 at sight, as the greenback’s positive momentum will likely extend heading into the next Nonfarm Payroll report release, FXStreet’s Chief Analyst Valeria Bednarik reports.
Key quotes
“The Old Continent is in the middle of a second wave, with new restrictions announced in France, Spain and the UK. The pandemic continues to take its toll on economic progress, with softening macroeconomic figures indicating that any possible recovery would take much longer than initially estimated.”
“More clues about the economic health of major economies will come this week, starting on Tuesday, with the EU September Economic Sentiment Indicator, and the preliminary estimate of September German inflation. About this last, its worth noting that central banks are keeping rates at record lows and refraining from announcing more stimulus, while inflationary pressures are far from enough to trigger a response from policymakers. The EU will also publish its September CPI estimates, while Germany will unveil August Retail Sales on Wednesday.”
“In the US, the presidential debate will take center stage. The format for the first debate will be six 15-minute time segments dedicated to different topics, such as the economy, coronavirus, riots and the Supreme Court, among other things.”
“The US Federal Reserve has highlighted the need for supporting the battered employment sector. September´s Nonfarm Payroll report will be out next Friday. At the time being, expectations are of 875K new jobs added in the month, quite a poor figure, while the unemployment rate is seen ticking down to 8.3% from the current 8.4%. Average hourly earnings are seen up by 0.4% MoM.”
“From a technical point of view, the EUR/USD pair seems to have reached an interim top at 1.2011, now biased lower. In the long-term, however, the ongoing decline seems corrective. In the weekly chart, the pair continues developing above all of its moving averages, with the 20 SMA maintaining its bullish slope above the larger ones. Technical indicators, however, turned sharply lower from overbought levels, and while still above their midlines, they signal solid selling interest.”
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