Monday, October 14, 2019

EUR/USD

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Fundamental Highlights

The trade optimism faded this morning, keeping the Euro sidelined after leading investment banks voiced concerns about the reliability of the latest trade deal. Without a durable dispute settlement mechanism in place, another round of tariff increases cannot be ruled out, Morgan Stanley analysts warned. Meanwhile, Goldman Sachs said there is a 60% chance that the announced 15% tariffs will take effect, but not until early 2020 as opposed to the current deadline of Dec. 15. JP Morgan said the first phase of the deal is positive, but the outcome is not a surprise for the market. Therefore, the US Dollar may gain ground once again due to a “sell the rumor, buy the fact” scenario. Nevertheless, the Single currency bulls may extend their gains further towards 1.11s before the momentum starts to fade away and the common currency rolls over.

Technical Analysis

The Single currency bulls extended their gains towards 1.1064 on Friday, as the buyers are looking to retest those levels and possibly even more, during today’s session, if the 1.1025 support level holds. The bias will remain with the bulls as long as price is trading above the 200-day moving average. The bears need to gather momentum and break below that level to regain control.

Support: 1.1025 / 1.10
Resistance: 1.1065 / 1.11

Chart (H4)
EURUSD