EUR/USD has been holding up above 1.17 amid fresh hopes for a US fiscal stimulus deal but fears of a double-dip recession are gripping the old continent and could send the pair below the 1.1685 critical support, Yohay Elam, an Analyst at FXStreet, reports.
See – EUR/USD to revisit the 1.1695 interim support – Commerzbank
Key quotes
“President Donald Trump has said he wants a bigger stimulus package than House Speaker Nancy Pelosi – the surprising twist to the endless has sent stocks higher and the safe-haven dollar lower. Pelosi set Tuesday as a deadline for reaching a deal, perhaps making some think that a deal can be reached quickly. Are these hopes real? Probably not. So far, Democrats have passed a bill worth $2.2 trillion while the White House offered only $1.8 trillion. Moreover, Senate Republicans are focused on the Supreme Court and seem to have returned to their opposition to a generous relief package, settling for a sub $1 trillion deal.”
“While the increase in US coronavirus cases – and especially in Wisconsin, a battleground – could impact the vote, the focus is on Europe. Italy joined France, Spain, and other countries in imposing restrictions to curb the spread of the disease, undermining the economic recovery. Christine Lagarde, President of the European Central Bank, expressed concerns about a slowdown, and some fear a double-dip recession is coming. As long as infections continue rising, the euro is set to remain under pressure.”
“EUR/USD is trading under the 50, 100, and 200 Simple Moving Averages on the 4-hour chart and suffers from downside momentum. Moreover, the Relative Strength Index is above 30 – outside oversold conditions. Critical support awaits at 1.1685, which was a slow point last week and also in late September. Further down, the next cushions are only at 1.1625 and 1.1610. Some resistance is at 1.1745, a high point on Friday.”
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