EUR/USD snaps three-week winning streak
- EUR/USD has snapped its longest winning streak since January 2018 with a 0.81% drop last week.
- The pair has violated key ascending trendline support.
- Trade optimism may bode well for the EUR, but Brexit uncertainty will likely cap gains.
EUR/USD fell 0.81% last week, ending the three-week winning streak, which was the longest since January 2018.
Further, the currency pair closed at 1.1079 on Friday, confirming a downside break of the trendline connecting Oct. 1 and Oct. 15 highs.
Therefore, the path of least resistance appears to be on the downside.
Even so, the pair may find bids in Europe on trade optimism. The US negotiators on Friday said that talks with China have progressed very well and suggested that a deal was close. Further, Trump called for Congress to pass the USCMA (US-Canada-Mexico) trade pact and said that China wants a trade deal, according to Westpac's FX Daily note.
That said, the upside could be capped by Brexit uncertainty. Also, big moves may not be seen as the data calendar in Europe is light and traders may remain on the sidelines ahead of the Federal Reserve's rate decision due on Oct. 30.
The market has priced in 25 basis points cut, but there is a divided opinion on what the FOMC will signal in terms of bias for future meetings, according to Reuters.
The European Central Bank's outgoing President Draghi is scheduled to speak at 15:00 GMT. The central bank head is likely to reiterate the dovish stance.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
