official Daily Market Analysis From Forexmart.eu

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EUR/USD. September 25, 2020 – The dollar is confidently moving to new highs

The EUR/USD pair continues to decline on Friday, and the euro runs the risk of renewing local minimums in the 1.1620 area during the day. The current quote for the pair is 1.1635.

The main support for the dollar, driving its growth, comes from the need of global investors for «safe» assets, as more countries mark the signs of a second wave of coronavirus. At the same time, market participants ignore the relatively weak American statistics. According to yesterday's data, the number of applications for unemployment benefits showed an increase to 870 thousand from the previous level of 866 thousand. The forecast was more optimistic and assumed a decrease in the indicator to 845 thousand.

The dollar showed some weakening yesterday, as investors' appetite for risky assets increased amid resumption of talks on additional stimulus for the US economy in the amount of $2.2 trillion.

Today we should pay attention to the publication of the US report on orders for durable goods for August, where the indicator could have increased by 1.1% m/m after earlier growth by 11.4% m/m. Macroeconomic publications are not expected in the euro area, so the dynamics of the EUR/USD pair will depend on data from the United States.
 

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AUD CAD today, as we see here, the trend is strong bearish, so the best choice for you is to sell it, you can sell it now at 0.94216 with potential target up to 0.94008

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GBP/USD. September 28, 2020 – Sterling is correcting after long weakening

On Monday, the British pound rate is showing some growth, approaching the level of 1.2850. However, this recovery can be regarded more as a corrective movement against a long downtrend, since the fundamental background for the sterling remains negative.

The British currency is still under pressure amid Brexit uncertainty. There is very little time left before the UK's exit from the EU, but the parties failed to reach an agreement on a trade deal. British Prime Minister Boris Johnson does not compromise with Brussels and is determined to leave the European Union on any terms.

In addition, the UK is showing the most dangerous situation among other European countries with the second wave of coronavirus. The authorities are forced to strengthen restrictive measures in order to avoid a complete lockdown, like in the spring.

Today the economic calendar is empty, therefore, given the news background, the pair will continue to fluctuate below the level of 1.2850 until new drivers appear.

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USD/CAD. September 29, 2020 – Looney makes weak attempts to recover

On Tuesday, the USD/CAD pair is showing a moderate decline, moving in the range of 1.3350-1.3400. The current quote for the pair is 1.3360.

The trading instrument is in the area of local highs in anticipation of new movement drivers. In the context of the coming second wave of the pandemic, the US dollar feels more confident than the «Canadian». However, there are factors that put some pressure on the USD rate. In particular, this is the uncertainty associated with the upcoming presidential elections.

The first debate between Donald Trump and Joe Biden kicks off tomorrow. The further direction of the American currency and its main Forex opponents will depend on the results of the meeting.

Macroeconomic calendar for today is not rich in publications. Attention should be paid to data on producer prices in Canada, but the rate of their decline should remain unchanged at 0.7%, so they are unlikely to somehow affect the Canadian dollar. The US is to report on the Conference Board Consumer Confidence Index. The indicator is expected to grow from 84.8 to 89.2 points.

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Brent. October 01, 2020 – Oil recovers after EIA report

During trading on Wednesday, oil started to rise to $42.50 per barrel. The prices were supported by data from the US Department of Energy on crude oil reserves in the country. According to a report by the Energy Information Administration (EIA), oil reserves in the reporting week fell by 2 million barrels to 492.4 million barrels. Analysts predicted an increase in reserves by 800 thousand barrels.

Now total US stocks are about 13% above the 5-year average. At the same time, gasoline inventories unexpectedly rose by 683 thousand barrels to 228.2 million barrels, while analysts expected their decline by 700 thousand barrels. Oil production in the US remained unchanged from the previous week at 10.7 million barrels per day.

Additional support for oil prices was provided by the decline in the US dollar across the Forex market amid increased hopes for the approval of a new package of fiscal stimulus measures in the United States. Market participants expect that the new bailout fund will be able to improve the prospects for economic growth and positively affect the demand for commodity assets. Thus, in case of agreement on the aid package, the current recovery in Brent may continue, the main target of the «bulls» is the $43 per barrel area.

GBP/USD. September 30, 2020 – The pound is consolidating at the 1.2850 area

The pound sterling has suspended growth against the dollar and is consolidating in the area of 1.2850. Statistics released today in the UK reflected local improvements in the UK economy. However, these data relate more to the II quarter, so the market is in no hurry to assess them too positively.

In particular, final UK 2Q GDP fell 19.8% QoQ versus a previous estimate of a 20.4% decline. Analysts did not predict a revision of the indicator, so we can say that the statistics have become a little more positive.

The final calculation of the volume of business investments in the second quarter reflected a decrease of 26.5% qoq, while according to the first estimate, the indicator fell by 31.4%. Business caution can be attributed not only to the coronavirus pandemic, but also to the difficult Brexit negotiations. It can be assumed that business is simply not in a hurry to invest finance so as not to take risks, while the prospects for Brexit are so uncertain.

Today the pair will spend the day in a narrow range of 1.2800-1.2850. The RSI indicator has stabilized in the neutral zone, which only confirms this scenario.

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EUR/USD. October 05, 2020 – Euro continues to move to new highs

At the beginning of the week, the EUR/USD pair managed to recover to the level of 1.1760, retracing the weak data on the US labor market, published last Friday. At the end of September, the US economy was able to create only 661 thousand new jobs outside agriculture, while the last month was marked by an increase of 1.489 million. Analysts predicted an increase of 850 thousand. At the same time, the unemployment rate in the United States in September fell from 8.4% to 7.9%.

The current quote for the pair is 1.1745. Some support for the dollar, as a defensive asset, was provided by the news of a positive test for coronavirus from US President D. Trump. On the eve of the presidential elections, Trump's illness could seriously harm the candidacy of the incumbent, who, as you know, is already lagging behind his opponent Joe Biden.

In addition to the situation with Trump's disease, investors are awaiting the decision of the US Congress on a new package of fiscal assistance to the population and companies affected by the pandemic. As soon as the stimulus is agreed upon, the pressure on the US dollar will intensify, which will lead to further growth of the European currency.

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EUR/USD. October 06, 2020 – Euro strengthens amid growing appetite for risky assets

At the trading on Monday, the EUR/USD pair managed to rise to the level of 1.1800 amid increased demand for risky assets after the news of D. Trump's discharge from the hospital. Moreover, rumors emerged in the American session that an agreement between Democrats and Republicans would soon be reached on economic stimulus, further fueling investors' appetite for risk.

However, on Tuesday the asset dropped to 1.1780. It became known that the American president, although he refused hospitalization, still feels unwell, which increases political uncertainty in the United States on the eve of the upcoming presidential election. As you know, while the candidate from the Democratic Party Joe Biden in the ratings is 14 points ahead of the incumbent president.

At the same time, the upcoming Brexit continues to exert pressure on the European currency. And until the UK's exit from the EU takes place, one should not expect an active strengthening of EUR/USD.

Today in the eurozone were published data on the volume of industrial orders in Germany: the indicator rose above forecasts (growth to 4.5% against the forecast of decline to 2.6%). The United States will provide statistics on imports and exports, as well as the number of vacancies in the JOLTS labor market in August. You should also pay attention to the speeches of the heads of the Central Banks of Europe (Christine Lagarde) and the USA (J. Powell).

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EUR/USD. October 07, 2020 – Trump has increased the volatility of the pair

At the end of Tuesday, the EUR/USD pair dipped to the level of 1.1745. Increased trading volatility was observed throughout the day, since after the discharge of American President D. Trump from the hospital, the demand for risky assets increased, and the euro managed to grow to 1.1765.

However, then Trump surprised the markets with his decision to end negotiations with Democrats on additional stimulus, which led to an increase in demand for the US dollar. Trump noted that he does not want the money to go to help the poorly governed states under Democratic rule. It is worth noting that the Republicans made a $1.6 trillion proposal to the Democrats. Democrats, in turn, insisted on the allocation of amounts from $2.2 to $2.6 trillion.

Democratic presidential candidate Joseph Biden equated such a decision by the incumbent with a betrayal of the American people.

Today the EUR/USD pair will consolidate in the 1.1750 area. In the evening, you should pay attention to the publication of the FOMC minutes.

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EUR/USD. October 08, 2020 – The pair is volatile above the 1.1750 level

On Thursday, the euro fell to 1.1750 after rising to 1.1780 earlier. On Tuesday, US President Donald Trump unexpectedly stopped negotiations with Democrats on an economic aid package, which led to the escape from risky assets and strengthening of the US dollar.

On Wednesday, the head of the White House said that he was already ready to sign some stimulus measures. Congress immediately voted for the government bills, which, among other things, include a package of measures to support airlines.

The dynamics of the pair is also influenced by the situation with the presidential elections in the United States. Pre-election polls show that the Democratic candidate Joe Biden is in the lead, and if he wins, Democrats could take control of the US Senate. As a result, the authorities will begin to adopt bills that run counter to previous policies.

Today we should pay attention to the data on the number of applications for unemployment benefits in the United States. Moreover, these data can provoke a jump in volatility in the market and a weakening of the dollar, since the number of initial applications is projected to increase. The current quotation of the EUR/USD pair is 1.1765, which confirms the forecast for further growth of the euro.
 

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EUR/USD. October 09, 2020 – Euro has returned to the highs of 1.1800

On Friday, the EUR/USD pair continued its confident ascent and reached the 1.1800 level. Interest in risky assets returned to the markets after Donald Trump announced that Nancy Pelosi, the President of the House of Representatives of the Congress, was ready to conclude an agreement on an aid package that would support the airline industry. The aid also involves a one-time financial payment to the American unemployed in the amount of $1200.

However, the rally in the European currency may be restrained by alarming news from Europe, where the second wave of coronavirus is gaining momentum. For example, in Germany, the number of infected has increased sharply, which may again lead to the introduction of tough restrictions. In this case, the «bears» will be able to seize the initiative in the euro/dollar pair.

The economic calendar is practically empty today. Traders continue to win back yesterday's data on the US labor market, which were worse than expected. In particular, the number of applications for unemployment benefits rose to 840 thousand, while analysts expected an increase to 820 thousand.

GBP/USD. October 09, 2020 – Pound is moving in different directions at the end of the week

At the end of the week, the GBP/USD pair is trading in different directions in the area of 1.2950. Today, macroeconomic data from the UK was published, which somewhat disappointed investors, but did not have a visible impact on the dynamics of the pair.

In particular, GDP growth for the month decreased from 6.6% to 2.1%. Industrial output fell to 0.3%, while manufacturing output fell to 0.7%.

The current moderate strengthening of the sterling can be explained by the general weakness of the US dollar in the Forex market. Earlier the US released data on applications for unemployment benefits, which were worse than forecasts. Also, pressure on the dollar was exerted by yesterday's statements by representatives of world Central Banks that the US economic recovery is developing worse than expected, which clearly shows the Fed's shortcomings.

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USD/CAD. October 12, 2020 – Canadian dollar strengthens to 1.31

At the beginning of the week, the US dollar is weakening across the entire spectrum of the market, which allowed the USD/CAD pair to fall to the 1.3100 area. The current quote is 1.3135.

The weakening of the US dollar was fueled by news of the resumption of talks by US lawmakers on an additional fiscal stimulus package. Market participants expect that an agreement between Democrats and Republicans will be reached soon, which will weaken the national currency.

At the same time, the Canadian dollar is receiving support from high oil prices and strong macroeconomic statistics. For several days in a row, Brent oil quotes traded above $43 per barrel, and the growth of the oil market, as a rule, acts as a driver for the strengthening of commodity currencies, including the Canadian dollar.

Moreover, last week a Canadian labor market report was published, according to which the number of employed people increased by 378.2 thousand in September, while the forecast of growth was only 156.6 thousand. Unemployment, respectively, fell from 10.2% to 9.0%. Today the economic calendar is almost empty, the pair will trade slightly above 1.31.

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EUR/USD. October 13, 2020 – Dollar grows in anticipation of inflation data

On Monday, the EUR/USD pair started to decline from the level of 1.1830. Today the downward trend continues, the current quote for the pair is 1.1780.

Pressure on risky assets came from yet another unsuccessful congressional negotiation on a new stimulus package. Nancy Pelosi has again rejected proposals from Donald Trump's team, which increases the likelihood that a decision on stimulus will not be made before the presidential elections on November 3.

Moreover, the growing gap in the rating of Joe Biden, the main opponent of Donald Trump in the presidential race, suggests that in the event of his (Biden’s) victory, the Democrats will constitute the majority in all power structures.

Today you should pay attention to the data on inflation in the United States, which should accelerate from 1.3% to 1.5%. In addition to the fact that the rise in inflation itself is a positive factor, it is also important that the indicators are close to the target levels of the Fed. Thus, in anticipation of these data, the pair will continue to decline to the 1.1770 area.

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EUR/USD. October 14, 2020 – Euro declines amid negative external background

The euro is losing ground on Wednesday, dropping to 1.1715. Demand for the US dollar rose after news of another deadlock in the Brexit negotiations, a new lockdown in the UK and the suspension of coronavirus vaccine testing by two pharmaceutical companies.

At the same time, the dollar is supported by statistics from the United States: the inflation rate increased by 0.2%, increasing for the fourth month in a row. Today you should pay attention to the statistics on the US producer price index in September, as well as on the data on industrial production in the eurozone in August. The latest figures reflected only 0.7% MoM growth in European production, after rising 4.1% in July. Analysts had forecast growth of 0.8%.

However, the strengthening of the American currency is held back by the course of the election race in the United States. The position of Joe Biden, the main rival of the incumbent President Donald Trump, remains strong, and his army of fans is growing every day. Experts point out that Biden's victory in the elections could give the economy more impetus for recovery and create conditions for a rally in the stock and foreign exchange sectors.

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USD/CAD. October 15, 2020 – Dollar hits 1.32 amid spread of second wave of coronavirus

On Thursday, the USD/CAD pair continues to trade near local highs just above the 1.3200 level. The US dollar is gaining support amid rising market concerns about the spread of the second wave of coronavirus worldwide.

In addition, investors drew attention to the suspension of trials of the Covid-19 vaccine by two US pharmaceutical companies due to the appearance of side effects.

Today the macroeconomic calendar is almost empty. Only data on the US labor market from ADP and speeches by members of the Board of the Bank of Canada and its head Tim Lane can attract attention.

The United States will provide data on applications for unemployment benefits: it is expected that the number of initial applications can grow from 840 thousand to 845 thousand, and the number of repeated applications should decrease from 10 976 thousand to 10 500 thousand. This means that the duration of unemployment in the United States continues to decline, which is currently the most important factor for the growth of the dollar.

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EUR/USD. October 16, 2020 – The euro is growing slightly from the level of 1.17

On Friday, the EUR/USD pair is growing moderately from the level of 1.1700, the current quote is 1.1725. During the current week, the euro showed weakening, responding to a decrease in demand for risky assets due to political and economic uncertainty in the United States and the worsening epidemiological situation in Covid in the world.

Experts note that restrictive measures have been reintroduced in many European cities, since they recorded significant jumps in the incidence of coronavirus.

Additional pressure on the euro is exerted by the complexity of the Brexit negotiations. London and Brussels have failed to move forward on the deal, exacerbating the risks of Britain leaving the EU without a deal.

However, today the euro has started to grow. The pressure on the dollar was exerted by yesterday's data on the labor market, which continues to experience difficulties for the second week in a row. The number of applications for unemployment benefits rose to 898 thousand against the previous level of 845 thousand. The forecast assumed a decrease to 810 thousand.

At the end of the day, the US is to release data on retail sales, which growth is expected to slow from 2.6% to 2.2%. You should also pay attention to the volume of industrial production in the States: experts predict a slowdown in the decline in production from -7.7% to -6.6%.

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Brent. October 19, 2020 – Oil fixed at comfortable levels

Brent oil prices have consolidated above $42 per barrel. The current quotation of the asset is $42.77.

Today, markets are focused on the meeting of the OPEC + ministerial monitoring committee. The parties to the agreement will meet to assess the state of the market, and it is unlikely that any decisions will be made regarding the supply. This will most likely happen at a meeting scheduled for November 30 – December 1.

One of the scenarios for the forthcoming report assumes that the oil market in 2021 will be characterized by weak demand and growing supply. For this reason, the participants in the energy pact can discuss easing the restrictions from January 1.

Thus, if a gradual increase in oil production by OPEC + countries against the backdrop of weak demand and an increase in production in Libya is questionable, the initiative on the oil market will finally go to buyers, which will allow Brent quotes to gain a foothold above $43.50 per barrel.

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EUR/USD. October 20, 2020 – Euro continues to rise above 1.18

The European currency continues to strengthen, following the dynamics of yesterday. The current quote for the EUR/USD pair is 1.1805. Market participants were actively selling the dollar on expectations of an early agreement on fiscal stimulus in the United States. On Sunday, House speaker Nancy Pelosi announced that if a decision on the issue of incentives is not made within 48 hours, the deal will not take place.

The euro was further supported by the comments of Christine Lagarde. The head of the ECB noted that she considers it necessary to leave the volume of the economic recovery fund in the amount of 750 billion euros. However, the strengthening of the euro above 1.1850 is not yet considered, as the epidemiological situation in Europe remains extremely tense.

Today you should pay attention to the publication of data on construction in the United States. Experts predict an increase in the number of building permits issued from 1.476 million to 1.52 million.

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EUR/USD. October 21, 2020 – Euro hits one-month high

The Euro has managed to grow to the level of 1.1870 since the beginning of the week, but on Wednesday it started to decline to the area of 1.1840. The dollar was pressured by expectations of an early agreement on economic stimulus measures in the States: House speaker Nancy Pelosi yesterday forced politicians to speed up the process of discussing the aid package.

An additional factor that puts pressure on the US currency is the growing sympathy of US residents for Joe Biden during the election race in the States. And if Trump's main opponent wins the presidential election, a lot of money will be poured into the US economy, which is obviously not a positive factor for the dollar.

Yesterday, statistics on construction in the United States were published: the number of new home bookmarks for September increased to 1.42 million against the previous figure of 1.39 million. The number of new housing permits issued was 1.55 million after the August figure of 1.48 million. Such data provided support to the dollar, which suspended the Euro rally.

Today, the macroeconomic calendar is almost empty, in the evening hours you should pay attention to the report on the Beige book in the United States.

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EUR/USD. October 22, 2020 – Euro declines towards 1.1800

On Thursday, the EUR/USD pair is declining moderately, continuing the dynamics of the previous day. The current quote for the asset is 1.1817. The macroeconomic calendar is practically empty today, all the market's attention is directed to what is happening in the US Congress.

A week and a half before the presidential election, the White House came close to concluding an agreement on a new stimulus package for the American economy. D. Trump said yesterday that he was ready to allocate $2.2 trillion to support the economic system, contrary to the intentions of his own Republican Party.

Thus, the fiscal support of the United States will definitely be carried out regardless of whether Trump or Biden takes the presidency in November.

Today we should pay attention to the publication of data on the consumer confidence index in the euro zone for October, where there may be a slight deterioration in the indicator from 13.9 points to 15 points. The US is to release September data on home sales in the secondary real estate market and statistics on the number of initial claims for unemployment benefits. Experts predict a slight decrease in the indicator.
 

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USD / JPY. 23.10 | "Inside bar" below the level of 105.00

On Wednesday, the price of USD / JPY bounced from 105.50, after which it fell by almost 1000 points, the head and shoulders pattern worked out, reaching the previously indicated target at the resistance level of 104.50.

We have not managed to update the lows yet, however, in the medium term we would like to see further development of the downward trend. Trades based on the “inside bar” pattern are risky, as there is also a high probability of a rebound from a strong level. In the near future I expect to consolidate above 104.50 and retest this resistance.