EUR/USD to face stubborn resistance around 1.1715

The EUR/USD pair retook the 1.1700 during European trading hours, extending its corrective advance, as bulls are in the lead ahead of US critical events with a critical Fibonacci resistance level emerging at 1.1712, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“The risk-on sentiment finds support in renewed hopes of a US coronavirus aid-package, and increased chances of a Brexit trade deal. On a down note, the UK and Germany, among other  European countries, are studying more restrictions to contain coronavirus contagions.”

“The EU published the September Economic Sentiment Indicator, which improved to 91.1 from 87.5 in the previous month. Germany released the preliminary estimate of September inflation, which was worse than anticipated, printing at -0.2% YoY. As for the US, the country has just published the August Goods Trade Balance, which showed that the deficit was of $-82.94B, worse than the previous $-80.11B. Later today, the focus will be on the US CB Consumer Confidence and several Fed’s speakers, ahead of the first US presidential debate.”

“From a technical point of view, the risk is skewed to the upside, as, in the 4-hour chart, technical indicators advance within positive levels. Even further, the 20 SMA has lost its bearish strength below the current level, although the 100 SMA maintains its bearish slope around 1.1780.” 

“An advance beyond the daily high of 1.1714 should favor an extension towards the mentioned 1.1780 price zone, mainly if the sentiment improves during US trading hours.”

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