Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Common currency reaches 2-month minimum
On Wednesday, the common currency headed south to the lowest value for two months following downbeat euro zone economic data, thus backing the evergreen buck versus a currency basket.
The currency pair EUR/USD slipped by 0.5% hitting 1.1414, which is the weakest result since August 20.
The common currency also dived versus the Japanese yen. The currency pair EUR/JPY lost 0.51% trading at 128.33.
The common currency extended losses after data disclosing that in October euro zone private sector activity soared at the slowest tempo for more than two years because an export-led deceleration widened out to the service sector.
The given data actually highlighted worries over the economic influence of levies as well as trade conflicts.
Italy was still in focus a day after the EU took the shocking step of rejecting Italy’s 2019 draft budget, giving the country’s cabinet three weeks to have a revised budget plan resubmitted.
Estimating the greenback’s purchasing potential against a number of its crucial counterparts the USD index rallied by 0.37% being worth 96.07.
The evergreen buck was virtually intact versus the Japanese yen. The currency pair USD/JPY hit 112.46.
The Federal Reserve has lifted interest rates up to three times in 2018 because the American economy has kept strengthening. As for the fourth rate lift, it’s expected to occur in December.
Aside from that, the UK pound approached a three-week minimum. The currency pair GBP/USD slumped by 0.41% being worth 1.2929.
The UK pound was still under pressure because Brexit negotiations were still stalled with just over five months until the United Kingdom is scheduled to abandon the European bloc and UK Prime Minister Theresa May experiencing heavy political criticism over her Brexit strategy.
Besides this, the Canadian dollar stood still against its American rival. The currency pair USD/CAD showed 1.3096.
The EUR made a significant rise on the news of the stimulus expansion. Will it last long?
April seasonal patterns weren’t supposed to work, but somehow they did. Even a strong fundamental issue such as the global recession amid the coronavirus couldn’t overwhelm it. That’s why May seasonal patterns may work as well.
The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!