
The EU plans to intervene in markets directly to curb rising energy costs, threatening to push the Euro area's economy into a deep recession.
2020-08-07 • Updated
The pair bounced off the key resistance at 1.1900. All eyes on the NFP.
The overall trend of EUR/USD has been bullish since the middle of March. The main reason for that rally has been the weak greenback. Why does the USD continue dipping? Firstly, investors avoid it as yields are decreasing in the USA. Secondly, Democrats and Republicans can’t make an agreement on the fiscal stimulus. This uncertainty weighs on the USD. Finally, the ADP report yesterday turned out much worse than analysts expected. Employment rose only by 167 000, while analysts predicted 1.2 million. Quite a huge gap! The data proves that the US labor market is still suffering from the coronavirus pandemic. As a result, investors anticipate that NFP will be worse than the forecasts tomorrow.
However, it seems that the upside rally has slowed down. The pair has been risen not as steeply as before. Nevertheless, most analysts have bullish prospects on the euro. It may be just a natural correction. After it, the pair should continue edging up again. It hasn’t been any important economic events for the euro on the calendar this week. The pair is mainly driven by the news from the USD side.
Watch out the US NFP report on August 7 at 15:30 MT time! If the NFP is worse than the forecasts, the USD will fall, therefore, EUR/USD will rise. Otherwise, if the NFP is better than the forecasts, the USD will increase, therefore, EUR/USD will decrease.
EUR/USD is trading above the 50, 100, and 200 moving averages. Thus, the impetus stays to the upside. The RSI indicator is below 70, that means the pair isn’t overbought yet. If EUR/USD breaks out the resistance at 1.1900, it will surge higher to the key psychological mark at 1.2000. Otherwise, it may meet the support at the 61.8% Fibonacci retracement level at 1.1820. The move below this level will push the price to the next support at 1.1740.
The EU plans to intervene in markets directly to curb rising energy costs, threatening to push the Euro area's economy into a deep recession.
The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.
The oil prices rally and world central banks’ dovish monetary policy caused by the Covid-19 pandemic were the main reasons for current inflation growth…
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
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