EURUSD stopped again. Overview for 20.10.2021

20.10.2021

After reaching its 3-week high, EURUSD paused not knowing what to do. 

The major currency pair took a break again. The current quote for the instrument is 1.1624.

The statistics published yesterday showed that the Housing Starts in the US in September was 1.56M after being 1.58M in the previous month and against the expected reading of 1.61M. The Building Permits dropped to 1.59M after being 1.72M in August. 

It’s not good news but one of the possible reasons is global delays in deliveries, as well as doubts about the future demand.

Right now, the USD has strong support in the form of expectations of the Fed’s comments on the statistics that were already published – the data on inflation, retail sales, and industrial production. The US regulator is expected to announce its decision to reduce the QE program in November in the nearest future, any day now literally. This factor gives a huge boost to the “greenback”.

On the other hand, the European currency has a lot of doubts about its monetary future. Philip Lane, Chief Economist of the European Central Bank, recently said that capital markets might be quite far away from adapting to a communication policy. It’s rather difficult to combine market expectations with the regulator’s intentions. It means that the ECB is not going to consider market expectations in its own forecasts and monetary steps and will stick to its policy as long as it sees fit. 

If one takes a look at the difference in rates, including in the nearest future, the Euro is in a weaker position. 

Attention!

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.