Search ForexCrunch

Investors are in cautious mode amid persistent political jitters. Therefore, EUR/USD is under pressure but remains stuck around 1.1800 without clear directional strength as bears are still shy, FXStreet’s Chief Analyst Valeria Bednarik reports. 

Key quotes

“The usual tensions persist, as US authorities are still unable to agree on a stimulus package, while there’s no progress in Brexit talks. Even further, China resumed its conflict with Australia, after banning imports of Australian thermal and coking coal, leaving some Australian vessels stuck at Chinese ports. In this scenario, equities trade in the red, while US indexes trimmed most of its Monday’s gains ahead of the opening.”

“Germany published the final readings of September inflation, which came in as expected, printing at -0.2% YoY. The country also released the October ZEW Survey, which showed that the Economic Sentiment contracted by more than anticipated, down to 56.1 from 77.4. For the EU, the sentiment was also worse than anticipated, falling from 73.9 to 52.3. As for the US, the country also published its final September CPI, which came in at 1.4%, YoY as expected. The core reading, however, missed the market’s forecast of 1.8% and was confirmed at 1.7%.”

“EUR/USD is under pressure, but still far from bearish, as it keeps trading above a daily ascendant trend line coming from late September and currently at 1.1770. In the 4-hour chart, the pair is stuck around its 20 and 200 SMAs, both converging just below the 1.1800 level. The 100 SMA, however, maintains its bearish slope well below the current level.”

“The EUR/USD pair would need to break above Friday’s high at 1.1829 to turn bullish, while bears will lead on a break below the mentioned trend line at 1.1770.”