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EUR/USD Price and Gold Gear Up for the Final Presidential Debate

EUR/USD Price and Gold Gear Up for the Final Presidential Debate

Equity’s rally hinges on positive news about the US stimulus bill, while the US dollar hits a one month low.

Equities

The US stock markets rallied slightly on Tuesday as Nancy Pelosi said that she was still hopeful of a stimulus deal before the elections. Investors will watch on Thursday at 9:00 PM Eastern time the final Trump vs. Biden showdown Live from Nashville. It is worth noting that, that the Democrat candidate Joe Biden leads the national polls and according to the BBC poll of polls Joe Biden is ahead by 51% against 42% of Trump.

The House speaker said that the stimulus would be bigger, better, and retroactive. The negotiations are stuck in between $1.88 trillion offered from the administration against the $2.2 trillion the Democrats demand. Meanwhile, the Fed member Evans hinted that not failing to deliver a stimulus package may not be an option. Although, he expressed his optimism about the 2021 recovery.

On the other side, the ECB president Lagarde warned of the increasing coronavirus numbers on the Eurozone’s economic recovery. The Covid-19 second wave forced some European countries to impose limited lockdowns to keep the infections in check.

Stock Market

Change %

S&P 500

+0.1%

Dow Jones

+0.1%

NASDQ

-0.1%

Japan 225

+0.1%

DAX 30

-0.2%

FTSE 100

+0.3%

CAC 40

-0.1%

EUR/USD and Main FX Markets

The US Dollar index retreated to an over four-week low and could be on the way for a test of the low end of the current trading zone 94.04- 91.78 as discussed in yesterday’s update: EUR/USD and Gold may surge as the US dollar shows weakness.

On September 10, the EUR/USD corrected its upward trend and since then, the pair has traded in a sideways move creating lower highs with higher lows. However, on Tuesday the market closed above the 50-day average indicating that bulls could push towards 1.1909.

The GBP/USD stabilized below 1.3048 as investors remained cautious about the outcome of the EU-UK free trade deal negotiations. It is noteworthy that, any failure in closing a deal before the end of the year would be negative for both sides. The pair’s outlook is neutral while below 1.3032.

Gold and Oil

On October 15, the Oil price’s rally lost momentum on a possible weaker demand caused by the Covid-19 increasing numbers in the US and Europe. However, hopes of a “near” US fiscal package have kept crude prices steady. The Brent Crude remained above $42.50 while the US crude above the 50-day moving average.

At present, the Gold price trades with no clear trend. Nonetheless, a break above the October 12 high at $1,930 changes the metal’s technical outlook to bullish.

Looking Ahead

On the economic calendar, the EUR/USD and Gold traders will follow the ECB vice president Guindo's speech at 11:00 AM (GMT) and the Canadian inflation numbers at 1:30 PM. Later on, Fed Members Brainard and Mester will speak at 1:50 PM and 3:00 PM, respectively. Finally, at 3:30 PM oil traders will know the change in the US oil stockpiles.

This information/research prepared by Mahmoud Alkudsi does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk. The research provided does not constitute the views of JME Financial Services (Pty)Ltd nor is it an invitation to invest with JME Financial Services (Pty)Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date the report is published, the research analyst and his/her spouse and/or relatives who are financially dependent on the research analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). The research analyst in not employed by JME Financial Services (Pty)Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation or particular financial needs before making a commitment to invest. The laws of the Republic of South Africa shall govern any claim relating to or arising from the contents of the information/ research provided.