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Old 26-10-2018, 10:07
ObasiFXMart ObasiFXMart is offline
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Default Re: Daily Market Analysis by ForexMart

EUR/USD Fundamental Analysis: October 26, 2018



The euro major pair has broken the level of 1.1400 and dropped to a new monthly low at 1.1355 yesterday after the ECB monetary policy meeting yesterday. They intend to keep the rates unchanged, which is not surprising after their remarks. Draghi said that he has confidence on both parties with Italy will reach an agreement and said that further stimulus is needed after inflation which will likely gain momentum by the end of the year despite weak activity. The pair was seen to have recovered for a bit during Draghi’s speech and reach as high as 1.1432 during the Asian market and headed towards 1.13. Currently, the pair is trading almost flat with a bearish tone as low as 1.1366 and declined by 0.07% on the day.

The European central bank confirmed of ending the asset purchase program in December despite the budget concerns of Italy, weak data output and Brexit deal negotiation. The euro did not pick up bid price after the Fed officials were not shaken the stock market was not shaken according to Fed vice chair, Richard Clarida, Thus, yield differentials are likely to further increase in favor of the greenback pair.

In regards to the situation of the trade war, a risk-off investor sentiment increases after the Chinese yuan declined to new 21-month low against the dollar, chances of a trade war between the US and China worsening. As fear in the market worsens, risky assets may lose their stand on the last trading session for the week.
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