Trade Idea (2020-10-27) EURUSD was sold on risk-off, but supported by 1.18

Trade Idea

Good morning.

Yesterday’s US stocks plunged and DJIA fell to $ 965 temporally. The number of newly infected people of CODID-19 in US is the highest ever, and risk-off bias is increasing.

Forex market was also in risk-off USD buying. EURUSD temporarily fell to 1.1805. GBPUSD was also sold, temporarily broke 1.30, but ended at around 1.3025.

Basically, it seems that quiet market will continue waiting for the result of US presidential election.

However, there is a view that USD selling on risk-on days is stronger than USD buying on risk-off days like yesterday. EURUSD is likely to be conscious of the weekly pivot 1.1815, 1.18, and the 20 Daily-MA around 1.177. ECB is scheduled for Thursday, 29th this week. Additional easing within this year has been factored in to maintain a long-term upward direction.

EURUSD H1 (Please click the chart to enlarge.)

GBPUSD H1 (Please click the chart to enlarge.)

Market Environment

Yesterday’s currency strength

US market yesterday

DJIA: 27,685.38 (-650.19, -2.29%)
NASDAQ: 11,358.94 (-189.35, -1.64%)
S&P 500: 3,400.97 (-64.42, -1.86%)
GOLD: 1,905.3 (-0.4)
OIL: 38.63 (+0.07)
US 10-YR: 0.796 (-0.007)
VIX: 32.46 (+4.91)

Asian market today

Nikkei: 23,401~ (-92)
CME Dow future: 27,655~(-30 Dow)

Economic indicators today

GMT 21:45(NZ)  Trade Balance
GMT 14:00 (US) Consumer confidence index