Everyone is very tired with the topic of COVID-19, which is still not fading into the background. And although investors were optimistic when news about effective vaccines were released, the attention of the market shifted today towards the continuation of negotiations regarding the US stimulus package.
Reports from the media that Republican and Democratic leaders in the Senate agreed to resume negotiations on new stimulus packages have inspired positivity in the stock markets and put pressure on the US dollar. It should be recalled that both parties used this topic to attract Americans before the US elections, but nothing happened after that.
A lot of multi-directional factors still affect the US currency, which forces the ICE dollar index to consolidate in a narrow range – around 92.23 to 92.50 points. It is negatively affected by any news regarding COVID-19 vaccines and new support measures needed to support the US economy. But on the other hand, reports on restrictive quarantine measures and the number of cases and deaths, support its exchange rate as a safe haven currency. In such a situation, it is very difficult for investors looking for profitability to get it, as there are only small intraday ranges and daily and weekly ones are not considered at all.
In fact, what we are currently seeing in the financial markets in general and in the currency market in particular is devoid of any certainty. Markets remain highly volatile, and some stock indexes simply show sideways dynamics with narrow ranges of values. Therefore, investors continue to wonder what will happen to the US election results, when will people start to get vaccinated and whether the Fed will cut interest rates to negative values or not.
Now, let’s go back to the currency market. Some traders sell the pound, in response to the news that the Brexit negotiation process is slowing down again. Meanwhile, others buy, interrupting their volumes with more significant ones. All this happens in the 65 pip range. It should be noted that without a clear trend supported by fundamental factors, it caused a lot of trouble to the investors, since currency pairs just nervously rise and decline, destroying the deposits of market participants. On this wave, speculators started to get interested in cryptocurrencies again just like in 2017.
As we closely monitor everything that is happening, this condition will most likely continue next week.
Forecast of the day:
The EUR/USD pair is trading in the range of 1.1815-1.1893. If it fails to break the upper limit of the range, it may reverse and decline to the level of 1.1815.
The GBP/USD pair is trading below 1.3300 and is likely to reach the level of 1.3310. But if it fails to break through it, it can further decline 1.3120.
The material has been provided by InstaForex Company – www.instaforex.com
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