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27.10.2020: EUR and GBP may drop against USD. Outlook for EUR/USD and GBP/USD.
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A rapid increase in the number of new virus cases is again on the agenda. At the same time, investors’ sentiment has a significant influence on Europe’s largest economy.
European currencies, including the British pound, showed a confident drop amid an announcement made by Germany’s Chancellor Angela Merkel. She said that the government was likely to introduce the same measures as in spring to contain the virus spread.
In the UK, the epidemiological situation is also becoming worse. However, the House of Commons is still opposing Boris Johnson’s proposal to impose tougher containment measures. In fact, governments of European countries have nothing to do but to reintroduce lockdown measures. Of course, investors are concerned about such a possibility as both medium and small businesses will hardly cope with the second economic shutdown. Thus, large players are reducing investments in European assets to minimize their potential losses.
It seems that today, traders may also ignore the US statistical data. Notably, expectations of the data on the US durable goods orders have boosted the greenback. The indicator is expected to advance by 0.4%. If the forecasts come true, the US industrial sector and retail sales may also jump.
The upward movement of the euro/dollar pair is becoming slower. The resistance level is located at 1.1880. After hitting this level, the euro/dollar pair dropped to 1.1800. If the price fixes below 1.1790 on the four-hour chart, sellers will become more active and the pair may decline to 1.1700. Otherwise, the euro/dollar pair may continue hovering between 1.1800/1.1880 until Thursday.
At the same time, the pound/dollar pair once again hit the psychological level of 1.3000. After that, it slowed down and declined. If the pair fixes below 1.2985 on the four-hour chart, traders are likely to open more short deals. In this case, the price may slide to 1.2900-1.2860. Otherwise, the pair may slow down near the psychological level.
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