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EUR/USD, Gold May Surge as the US Dollar Shows Weakness

EUR/USD, Gold May Surge as the US Dollar Shows Weakness

Equities retreated on fading hopes of passing the US stimulus bill before the US elections, while markets gear up for the final presidential debate this week.

Equities

Most global stock markets traded lower on Monday as Republicans and Democrats showed no signals of an imminent deal about the fiscal stimulus. The current political division makes passing the long-waited bill most likely after the US election.

Markets will follow the Trump vs. Biden presidential debate at Belmont University in Nashville, on Thursday 9:00 PM US Eastern time, Friday 5:00 AM UAE time. Topics like the coronavirus combating, and national security will be on the debate’s agenda.

Federal Reserve’s officials stressed on the direct relationship between Federal spending and the US economic recovery, as more delay in passing the fiscal stimulus bill will slow down the economic growth.

S&P 500

-0.7%

Dow Jones

-0.7%

NASDQ

-0.7%

Japan 225

+0.2%

DAX 30

-0.8%

FTSE 100

-0.7%

CAC 40

+0.06%

EUR/USD and Main FX Markets

The current delay in passing the US stimulus package could lead the Fed to ease its monetary policy further and put the greenback under new pressures. Technically, the US Dollar index created a lower high at 93.90 and failed to test 94.04 highlighting bull’s weakness. Therefore, the price could be on the way for a test of 91.78.

By the end of last week, the EUR/USD rebounded around 1.1713 then rallied on Monday and rebounded from the 50-day moving average. A break above the October 9 high at 1.1830 generates a positive signal and may send the price even higher towards 1.1909.

The British Pound rallied on Monday on news of the UK government may ease its negotiating stance, especially the controversial internal market low. This development spark hopes that an EU/UK free trade could be achieved by next month. Technically, the GBP/USD rebounded around the 50-day average, eyeing a test of 1.2773.

Gold and Oil

Concerns of COVID-19 increasing cases in the US and Europe combined with the growing Libyan output weighed on oil prices. From a technical point of view, On October 15, the Brent Crude failed to end its sideways move as created a lower high at $43.45. On Monday, the price slipped by 0.7% and closed below $42.50. Hence, a break below the October 12 low at $41.34 produces a negative signal and could send the price even lower towards $39.60.

The Gold stabilized last week below $1,921. That said, a break above the October 12 high at $1,931 would change the outlook of the precious metal to bullish.

Looking Ahead

Not much on the economic calendar, EUR/USD and Gold traders will find out about the US housing starts of September at 1:30 PM (GMT) then-Fed members Quarles and Evans will speak at 3:50 PM and 6:00 PM, respectively.

Esta información/estudio preparada por Mahmoud Alkudsi no tiene en cuenta los objetivos específicos de inversión, la situación financiera o las necesidades particulares de una persona. El analista de estudios es, principalmente, responsable del contenido de este informe de estudio, en parte o en su totalidad, certifica que los puntos de vista sobre las compañías y sus valores expresados en este informe reflejan con exactitud sus puntos de vista personales, y como consecuencia, toda persona que actúe basándose en ellos lo hace bajo su propio riesgo.

El estudio proporcionado no constituye los puntos de vista de JME Financial Services (Pty) Ltd., ni es una invitación a invertir con JME Financial Services (Pty) Ltd. El analista de estudios certifica, además, que ninguna parte de su remuneración ha sido, es o será directa o indirectamente relacionada con recomendaciones o puntos de vista específicos expresados en este informe.

A partir de la fecha en la que se publique el informe, el analista de estudios y su esposo/a o familiares que dependen financieramente de dicho analista, no mantendrán intereses en los valores recomendados en este informe (“como “intereses” se incluyen la titularidad directa o indirecta de los valores).

El analista de estudios no está contratado por JME Financial Services (Pty) Ltd. Le animamos a buscar asesoramiento con un consejero financiero independiente con respecto a la idoneidad de la inversión, en virtud de otra participación separada, cuando considere oportuno que es conforme con sus objetivos específicos de inversión, su situación financiera o, sus necesidades financieras particulares antes de comprometerse a invertir..

Las leyes de la República de Sudáfrica regirán cualquier reclamación relacionada o que surja de los contenidos de la información/estudio proporcionado.