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EUR/USD Price: Why Markets Shifted to Risk-off Mode?

EUR/USD Price: Why Markets Shifted to Risk-off Mode?

Demand for Safe Haven increases, and the IMF with World bank improves their global economic forecasts, what are EUR/USD, Gold, and other market movers today?

The Japanese industrial production number for August released earlier of -13.8% came in lower than expected of -13.3% however, better than the prior read of -15.5%. However, the released data did not have any noticeable effect on the Japanese yen against major currencies.

Equities

Risk-on sentiment reversed on Tuesday on news of the delay in agreeing on the US financial aid and pausing Johnson & Johnson COVID-19 vaccine’s trials due to the unexplained illness of a participant. Additionally, the Bank of England governor said that the economic recovery faces headwinds from the second wave of the coronavirus, so he did not think that the UK economy was undergoing a V shape recovery.

The International Monetary Fund and the World Bank have slightly improved their global growth forecast and predicted that the global GDP to contract 4.4% this year, compared to the 5.2% forecasted in June thanks to lifting the lockdown majors. This step helped to accelerate the economic recovery of some countries, especially China and concluded that maintaining current stimulus majors is decisive for families and businesses until finding a solution for the coronavirus.

Stock Market

Change %

S&P 500

-0.6%

Dow Jones

-0.5%

NASDQ

+0.04%

Japan 225

-0.5%

DAX 30

-1.1%

FTSE 100

-0.7%

CAC 40

-0.6%

EUR/USD and Main Currency Pairs

The US dollar benefited further from a weaker risk-on sentiment. This week, the US Dollar index U-turned and rose by 0.5% eyeing a test of 94.04.

The EUR/USD closed on Tuesday below the 50-day average shifting the market direction towards the low end of the current trading zone 1.1909- 1.1713. Close below 1.1713 could encourage bears to press towards 1.1621.

The GBP/USD edged lower on Tuesday and closed below 1.3048 eyeing a test of 1.2773. Markets will keep an eye tomorrow on the European council meeting as the future relationship with the UK will be on the European leaders’ schedule.

Gold and Oil

The Brent oil failed to close above $42.50 twice this week reflecting the lower global demand caused by the increased number of COVID-19 cases in Europe and elsewhere. The price may keep falling towards $39.60 while the US Crude could trade towards 38.37.

The Gold failed to close above the 50-day average and lost on Tuesday 1.6% of its value due to a stronger US dollar. The precious metal could be on the way to test $1,861/oz.

Looking Ahead

The EUR/USD and Gold traders will find out about the Eurozone industrial production number of August at 10:00 AM (GMT) the US PPI figures of September at 1:30 PM and Fed members Clarida and Quarles will speak at 2:00 PM and 8:00 respectively.

Maklumat/penyelidikan ini disediakan oleh Mahmoud Alkudsi dan tidak mengambil kira objektif pelaburan tertentu, keadaan kewangan atau keperluan khusus individu. Penganalisis penyelidikan bertanggungjawab terhadap kandungan laporan penyelidikan ini, samada sebahagian atau keseluruhannya, memperakui bahawa pandangan mengenai syarikat dan sekuriti mereka yang dinyatakan dalam laporan ini jelas mencerminkan pandangan peribadi dan pedagang bertanggungjawab sepenuhnya ke atas risiko mereka sendiri.

Penyelidikan yang disediakan bukanlah pandangan JME Financial Services (Pty) Ltd ataupun undangan untuk melabur dengan JME Financial Services (Pty) Ltd. Penganalisis penyelidikan juga memperakui bahawa tiada sebahagian daripada pampasannya, adalah, atau akan, secara langsung atau tidak langsung, berkaitan dengan cadangan atau pandangan tertentu yang dinyatakan dalam laporan ini.

Sehingga tarikh laporan diterbitkan, penganalisis penyelidikan dan pasangannya dan/atau saudara-mara yang bergantung kepada penganalisis penyelidikan, tidak memegang kepentingan dalam sekuriti yang dicadangkan dalam laporan ini (“kepentingan” termasuk pemilikan langsung atau tidak langsung terhadap sekuriti).

Penganalisis penyelidikan tersebut bukanlah di bawah JME Financial Services (Pty) Ltd. Anda digalakkan mendapatkan nasihat daripada penasihat kewangan bebas mengenai kesesuaian pelaburan, di bawah penglibatan berasingan, seperti yang anda anggap sesuai dengan objektif pelaburan tertentu anda, keadaan kewangan atau keperluan kewangan tertentu sebelum membuat komitmen untuk melabur.

Undang-undang Republik Afrika Selatan akan mengawal sebarang tuntutan yang berkaitan dengan atau yang timbul daripada kandungan maklumat/ penyelidikan yang disediakan.