EURUSD
EURGBP has drifted lower four a fourth-straight session as the market awaits a speech by European Central Bank President Christine Lagarde. The pair was 0.25% lower as the market pulls back from fears over Brexit.
The ECB’s Ignazio Visco said on Sunday that the recent strengthening in the Euro was a worry if it drags inflation further from the bank’s inflation target. The policymaker also denied that the board were divided on the matter.
Visco added:
The monetary policy implications are obvious: if the downward pressures jeopardise our price stability objective, we’ll have to intervene.
The comments on Sunday will add some importance to Lagarde’s speech today. If she echoes the thoughts about Euro strength, and especially a need to take action, the pound could gain some real ground against the Euro.
Yesterday brought another surge of virus cases in France with 11,000 additional cases. Now that the U.K. has confirmed its restrictions and noted a potential two-week lockdown, a surge in Europe could see further rules in European countries. This could also add some downside risk to the Euro but we also have Brexit on the horizon with the mid-October deadline still in play.
EURGBP failed to hold the 0.9175 level and has drifted to support at the 0.9100 which will be the key level for the week ahead. Support lies at the 50-day moving average around 0.9050 and the 0.9175 level will be the resistance to further gains. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
