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EUR / USD is recovering due to the weakening of USD across the entire spectrum of the market

Due to the weakening of USD (dollar index -0.15%), the EUR / USD pair this morning was able to win back some of the positions it had lost the day before.

 

The negative impact on the US currency is provided by the news about the lack of progress in the inter-party negotiations to agree on a new package of economic stimulus measures and weak data on the housing market, published on Monday.

 

Talks between the White House and the Democrats have been virtually suspended. White House economic adviser Larry Kudlow stated that so far the parties have failed to achieve progress and the negotiation process has slowed significantly. It is obvious that the parties will not be able to agree on the bill before the presidential elections. At the same time, the US economy needs new incentives due to record rates for the incidence of COVID-19.

 

The data on new housing sales published yesterday turned out to be significantly lower than the market's expectations: 959 thousand against the expected 1,025 thousand. The data indicates a worsening situation in the real estate market.

 

In Europe, investor attention remains focused on news of the spread of the coronavirus. Over the past day in France, a record increase in cases was recorded. Once again, more than 10 thousand infected per day were registered in Germany. EU countries are gradually tightening quarantine measures to slow the spread of the virus, which will inevitably lead to a decrease in economic activity in the region. This could limit the recovery potential of the EUR / USD pair.

 

In the economic calendar today, all attention will again be directed to statistics from the United States. The publication of a report on orders for durable goods and an index of consumer confidence from CB is expected.

 

Buyers were able to defend the support at 1.1800 yesterday. This is a positive signal, indicating a possible recovery of the currency pair to the level of 1.1865. In case of a breakdown of this level, one can expect an increase in quotations to 1.1905.

 

  • Resistance levels: 1.1865, 1.1905, 1.2010.

 

  • Support levels: 1.1800, 1.1750, 1.1700.

 

The main scenario - an increase to 1.1865.

 

An alternative scenario - a breakdown of support at 1.1800 and a decline to 1.1750.

 

The current fundamental outlook is moderately positive. We consider longs in the range of 1.1805-1.1820.

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