Gold Is Pressed By Strong USD
XAU/USD looks weak. Will it keep falling? Let's find out!
EUR/USD ahead of Fed speech
Information is not investment advice
The US dollar waned amid the current risk-on sentiment, driven by many reasons. First of all, Donald Trump returned to the White House after spending three days in the hospital. On Friday, he was positively tested on Covid-19, but on Monday evening doctors let him go as he felt better. Secondly, US officials are planning to impose a fiscal stimulus package, which investors have been waiting for. Elsewhere, US and European PMI reports came out better than analysts expected, boosting risk-on sentiment as well.
Today ECB’s President Lagarde delivered a speech and pointed to the uncertain and shaky recovery ahead. Moreover, she emphasized that the ECB is “very attentive” to the exchange rate as officials aren’t satisfied with the current strong euro, which dampens the EU export and weighs on inflation.
Later on, the Fed will speak as well, which will add fresh volatility to EUR/USD. A more hawkish statement will underpin the USD, while a more dovish tone will weigh on the dollar.
Technical tips
EUR/USD has bounced off the 200-period moving average of 1.1800 and headed to the downside. The move below the 38.2% Fibonacci retracement level at 1.17640 will increase chances for the pair to dip lower and retest the 23.6% Fibo level of 1.17050. However, the 1.17640 level has been acting as strong support, and EUR/USD has failed to break it many times. That’s why, we can assume that the same case may happen again this time, and the pair might reverse and jump higher. Resistance levels are at the 200-period moving average of 1.1800 and the 50.0% Fibo level of 1.1810.
Kseniya Medik
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