The EUR/USD pair has seen a slight increase above 1.0800, as investors focus on a slew of economic data from both the US and the Eurozone. The German economy is expected to have contracted by 0.3% in the third quarter on an annual basis, while the Eurozone as a whole is seen growing by 0.8% YoY. Risk aversion could stay high amid uncertainty over the US presidential election. The Eurozone economy is expected to grow by 0.8% YoY, higher than the second quarter’s 0.6% expansion, with Spain and other economies expected to contribute significantly while Germany is forecasted to see a decline in Q3. ECB policymaker Joachim Nagel emphasized the importance of implementing growth packages to prevent further economic deterioration.
The US Dollar has retreated from an almost three-month high, with the US Dollar Index (DXY) falling back from 104.60. The outlook on the US Dollar remains firm as investors remain risk-averse ahead of the upcoming US presidential election. Possible consequences of former US President Donald Trump winning the election have been discussed at the sidelines of the IMF meeting, with the outcome seen as positive for the US Dollar. Traders await a string of US data to be released this week, focusing on JOLTS Job Openings, Nonfarm Payrolls (NFP), and Q3 GDP data for insights into job demand and economic health.
The US Dollar showed strength against the Australian Dollar in today’s trading session, with minor changes against other listed major currencies. Technical analysis for the EUR/USD pair shows it striving to maintain levels above 1.0800, where it has held above an upward-sloping trendline near 1.0750. Despite this, the major currency pair remains below the 200-day Exponential Moving Average (EMA) at around 1.0900, indicating a bearish outlook. The 14-day Relative Strength Index (RSI) suggests strong bearish momentum, with potential downside towards the 1.0700 support if it falls below 1.0750.
The Gross Domestic Product (GDP) Annualized, a key economic indicator released by the US Bureau of Economic Analysis, measures the value of goods and services produced in the US in a given period of time. Changes in GDP are crucial for determining the nation’s economic health, with a high reading seen as bullish for the US Dollar and a low reading considered bearish. The 2020 US election outcome, combined with inflation data and other indicators, will play a significant role in determining the interest rate decision by the European Central Bank (ECB) in December. Keywords: EUR/USD, US Dollar, Eurozone, GDP, ECB, interest rates, economic data, US election.
