Source: Economic Events October 02, 2020 - Admiral Markets' Forex Calendar
Compared to last week, the overall picture in EURUSD hasn't significantly changed over the last several days.
With a drop below 1.1700 the short-term forecast remains short and this could change only if we see a push to above 1.2000.
We are still favouring a stint to below 1.1600 with the currency pair testing the region around a potential mid-term long-trigger at 1.1450/1500.
However, the US-Dollar could see heavier continued selling pressure into the weekly close, which could help Euro bulls achieve a weekly close substantially above 1.1700. This would serve as one of the first signs that the short-term USD correction might be over.
Here are some key points to consider
- On Tuesday, inflation data from Germany showed a deflationary tendency coming in at -0.2% (YoY)
- This has been the largest decline since January 2015 and is below market expectations of -0.1%
- The ECB finds itself in a dilemma, currently (while the USD is kept under pressure from the FED, the ECB is running out of ammunition to weaken the European currency to help weaker EU economies like Italy and Spain, which has resulted in a relatively strong Euro compared to the US-Dollar).
If today's US Non-Farm Payrolls disappoint, here is what we are considering:
- This would force the US central bank FED to balloon its balance sheet again significantly beyond the 7 trillion USD mark
- This seems more likely when we consider recent comments from FED chairman Powell in front of the US Congress last week when he said the central bank is committed to helping the economy and that the FED will continue to provide support "for as long as it takes"
- What also seems likely is that the FED will deliver liquidity to smaller-sized corporations, which could take the USD down, thus giving a boost to EURUSD.
With that in mind, we see the target for the upcoming 6 – 12 months remaining untouched at around 1.2500:
Source: Admiral Markets MT5 with MT5SE Add-on EURUSD Daily chart (between June 26, 2019, to October 01, 2020). Accessed: October 01, 2020, at 10:00 PM GMT. Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the EURUSD fell by 10.2%, in 2016, it fell by 3.2%, in 2017, it increased by 13.92%, 2018, it fell by 4.4%, 2019, it fell by 2.2%, meaning that in five years, it was down by 7.3%.
Discover the world's #1 multi-asset platform
Admiral Markets offers professional traders the ability to trade with MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level than with MetaTrader 4. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5!
Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
- Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.