EUR/USD Kicks Off Monday’s Session with Gains
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- The pair trades on the upside
- No consensus for the US stimulus package
- ECB President to speak today
The EUR/USD is trading to the upside in today’s early hours of the European session. The pair opened the week at 1.1810 and slowly started climbing to the current market price of 1.1830. The Euro has been strengthening against the US dollar in the short-term view since Sep 28 when the exchange rate hovered at a low of 1.1612. The current market price is now at a three-week high.
In the medium-term, it will take more firepower on the bulls’ side to beat the latest high of 1.2011 reached on Sep 1 as the pair has since traded in the range between 1.16 and 1.19. Ongoing developments related to hopes for a stimulus package have been affecting the price as of last week when we saw the Euro close higher against the weaker dollar. The opening price for last week was 1.1711, while the closing price was 1.1831. So far, the trend has been continued.
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Uncertainty Still Surrounds Stimulus Deal
In light of fundamentals, there is still no certainty of reaching a stimulus deal. It became clear over the weekend that President Trump had proposed a stimulus package of $1.8 trillion. Contrary to the deal, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were unable to reach a consensus, thus bringing investors’ hopes and expectations into the new week.
In the long-term, however, the euro is in an uptrend with positive sentiment since its lowest point reached on Mar 19 amid the fear over the COVID-19 rapid spread across the globe. The euro traded at 1.0637 against the US dollar and has since made a 12.90% recovery or 13.73 cents to a high of 1.2011, which was previously reached on May 14, 2018.
Not much is expected to happen today as fundamentals show no activity or events apart from a speech by the ECB President Christine Lagarde scheduled for 11.00 GMT. Expected keynotes in her speech are a continued dovish position, remarks on providing financial aid through additional cash injections, and comments on the pandemic’s effect on the economy.