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EUR/USD Price Reverses Direction on the US Stimulus Package Updates

EUR/USD Price Reverses Direction on the US Stimulus Package Updates

Safe-havens rallied on the news coming from Washington while equities and risk-related currencies retreated. What moves markets today?

Equities

On Tuesday President Trump made a U-turn and instructed its administration to stop negotiating until after the elections and he promised that after “his victory” he would pass a major stimulus bill that focused on hardworking Americans and small businesses. However, Trump urged the US Congress to approve a $25 billion bailout to aviation companies. Meanwhile, the Fed Chair Powell warned that failure to secure financial aid would lead to a weak economic recovery and create unnecessary hardships.

These updates negatively affected investor’s sentiment sending global stock markets lower and safe havens higher.

Stock Market

Change %

S&P 500

-1.3%

Dow Jones

-1.2%

NASDQ

-1.5%

Japan 225

-0.5%

DAX 30

-0.4%

FTSE 100

-0.8%

CAC 40

-0.5%


Currencies

The US Dollar as a safe-haven benefited from the recent updates and rallied on Tuesday against risk-related currencies. The US Dollar index steadied above the inverted head and shoulders neckline therefore, a close above 94.04 could send the price towards 95.24.

The EUR/USD failed on Tuesday to overtake the 50-day average then pointed lower for a test of 1.1713. A daily close below this level could send the pair towards 1.1621.

The GBP/USD tested the 1.3000 level then lost 0.8% of its value due to the US dollar rally. The price could drop further towards 1.2773.


Commodities

The oil price benefited from the news of a possible storm in the Mexico Gulf that could put oil production on hold however, the rally lost steam on the news of delaying the US stimulus package. The Brent oil, failed to close above $42.50 hinting to re-test $39.60, while the US Crude failed to overtake the 50-day moving average, and therefore the price could fall towards $38.37.

The Gold price rebounded from $1.920 and pointed lower eyeing a test of $1,861. A daily close below that level could send the precious metal even lower towards $1,796.

Looking Ahead

Investors will follow the ECB president Lagarde’s speech at 1:10 PM (GMT) and Fed member Barkin's speech at 6:00 PM, then at 3:30 PM markets will find out about the change in the US oil inventories, and by 7:00 PM the FOMC minute will be released. Fed members Williams, Kashkari will talk at 8:00 PM, and 6:00 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.