![\"support](\"https:\/\/shared.gighl.com\/Morning-Pictures-2020\/October-2020\/16-10-2020\/EURUSD%20H4%2010162020.PNG\")
<\/p>\nThe USD tended to gain some ground against other major currencies yesterday, possibly preparing for the best week in the month as safe haven flows tended to continue to support it. A rise of COVID 19 cases in the US Midwest and as the US fiscal stimulus seems to be delayed, investors seemed less willing to take risks and preferred the safe haven qualities of the greenback. Analysts tend to highlight that market participants may be fearing a possible slowdown in economic activity, which could endanger the economic recovery of the US, as the new COVID 19 cases are on the rise. Its characteristic that the US initial jobless claims figure yesterday rose instead of dropping as expected, increasing worries for the US employment market once again. We expect that should market worries continue to flood the markets, safe haven inflows may intensify for the USD initially.
\nEUR\/USD dropped yesterday breaking the 1.1720 (R1) support line now turned to resistance. As yesterday\u2019s drop confirmed the downward trendline, we tend to maintain a bearish outlook for the pair. Should the bears actually remain in charge of the pair\u2019s direction, we could see it breaking the 1.1655 (S1) support line and aim for the 1.1600 (S2) level. Should the bulls take over, we could see the pair breaking the 1.1720 (R1) line and aim for the 1.1790 (R2) level.<\/p>\n
Volatility could be high for the GBP today and on Monday as the UK Prime Minister Johnson will have to decide on whether the UK stays or leaves the Brexit negotiating table. UK\u2019s PM stated that he was disappointed by the Brexit negotiations and that he would assess whether a deal was reachable after this week\u2019s EU summit. Officials from both the EU and the UK stated that chances of the UK leaving the negotiating table seem to have increased. At the same time London is to employ tighter lockdown measures from midnight on as the UK faces a rise of COVID 19 cases. We expect Brexit currently to be the main fundamental issue troubling the pound, yet once again the path of the pandemic in the UK may also have an effect.
\nGBP\/USD tumbled yesterday once again breaking the 1.3015 (R2) and the 1.2945 (R1) support lines, both now turned to resistance and continued lower to test the 1.2885 (S1) level. It\u2019s characteristic of how intense fundamentally the overall picture of the UK is as the pair has presented wide volatility over the two days. We expect volatility to continue and should the pair not bounce on the 1.2885 (S1) line, the downward movement could turn to a bearish trendline guiding the pair. We would advise caution though as fundamentals on both sides of the pair are severe and could cause the market\u2019s sudden and intense reaction to either direction. Should the selling interest of the market continue for the pair, we could see it breaking the 1.2885 (S1) line and aim for the 1.2800 (S2), while even lower we note the 1.2725 (S3) level. Should buyers have the upper hand over cable\u2019s direction, we could see it breaking the 1.2945 (R1) line and aim for the 1.3015 (R2) level.<\/p>\n
During today\u2019s European session we get Eurozone\u2019s final HICP rate for September. In the American session, we highlight from the US the retail sales growth rate and industrial output growth rate, both for September, the preliminary University of Michigan Consumer Sentiment for October, as well as the Baker Hughes oil rig count. From Canada please note the release of the manufacturing sales growth rate for August. As for speakers please note BoJ Deputy Governor Wakatabe, St. Louis President Bullard and NY Fed President Williams are scheduled to speak. During tomorrow\u2019s Asian session we get Japan\u2019s trade balance for September , while from China the GDP rate for Q3 as well as the industrial output and retail sales growth rates for September.<\/p>\n
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Support: 1.1655 (S1), 1.1600 (S2), 1.1545 (S3)<\/p>\n
Resistance: 1.1720 (R1), 1.1790 (R2), 1.1850 (R3)<\/p>\n
![\"support](\"https:\/\/shared.gighl.com\/Morning-Pictures-2020\/October-2020\/16-10-2020\/GBPUSD%20H4%2010162020.PNG\")
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Support: 1.2885 (S1), 1.2800 (S2), 1.2725 (S3)<\/p>\n
Resistance: 1.2945 (R1), 1.3015 (R2), 1.3085 (R3)<\/p>\n
![\"benchmark-16-10-2020\"](\"https:\/\/shared.gighl.com\/Morning-Pictures-2020\/October-2020\/16-10-2020\/benchmark-16-10-2020.PNG\")
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![\"morning-releases-16-10-2020\"](\"https:\/\/shared.gighl.com\/Morning-Pictures-2020\/October-2020\/16-10-2020\/morning-releases-16-10-2020.PNG\")
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Disclaimer:<\/p>\n
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.<\/i><\/p>","protected":false},"excerpt":{"rendered":"
The USD tended to gain some ground against other major currencies yesterday, possibly preparing for the best week in the<\/p>","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_daim_seo_power":"","_daim_enable_ail":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-14845","post","type-post","status-publish","format-standard","hentry","category-uncategorized","blog-category-financial-news","entry"],"acf":[],"yoast_head":"\n