01.10.202016:45 Forex-elemzések és áttekintések: EUR/USD at a crossroads: dollar's hopes and euro's fears

The main currency pair was at a crossroads. On the one hand, positive market sentiment pushes it up, while on the other hand, downside risks remain high.

On Wednesday, US Treasury Secretary Steven Mnuchin expressed optimism about another stimulus package. "We are going to make another serious attempt," he said.

Along with strong US private-sector employment data from ADP, this helped stocks rise and lowered the USD index to a one-week low of 93.6 points.

While the market believes a deal is close, Senate Majority Leader Mitch McConnell believes it is still a long way off.

The size of the next financial aid package for the United States remains a stumbling block.

Democrats are offering to accept a $2.2 trillion stimulus package for the national economy, while Republicans are willing to accept only $1.5-1.6 trillion.

The failure of negotiations may lead to a fall in stock indices and a resumption of growth in the USD.

Another risk comes from Donald Trump. The head of the White House said that he would refuse to accept the election results if Joe Biden wins. If Trump really loses and refuses to accept the election results, the situation may get out of control. Against the background of the growing internal political confrontation in the United States, the stock market may once again go into a deep peak, returning demand for a safe greenback.

The third risk factor is the continued increase in cases of coronavirus in the Old World. Although the number of deaths in the EU is still lower than in the United States, the fear of a worsening situation may put pressure on the euro.

"The EUR/USD pair rose after completing the formation of a short-term base above 1.1688 and is now approaching the area of stronger resistance, which begins at 1.1764 and extends to 1.1804 (55-day moving average, a downward trend from the peak of early September and 38.2% rollback of the September fall)," Credit Suisse experts noted.

"Support is at 1,1709, then at 1,1693. A break of 1.1665-1.1661 will cause bearish pressure on the pair and target it at 1.1642, 1.1598, and 1.1485-1.1495. Meanwhile, a break of 1.1804 will contribute to the resumption of the upward trend and will target the pair at 1.1827, 1.1873-1.1883, 1.1918, and 1.2011," they added.