Forex news from the European morning session - 27 October 2020
Headlines:
- UK October CBI retailing reported sales -23 vs -1 expected
- PBOC asks banks to suspend counter-cyclical factor in CNY fixing formula -report
- Eurozone September M3 money supply +10.4% vs +9.6% y/y expected
- Spain says that it will raise corporate, wealth taxes
- RBA's Bullock: Financial system is in a good position to support the economy
- China says will take necessary measures to uphold its security interests, following US arms sale to Taiwan
- Germany reports 11,409 new coronavirus cases in latest update today
Markets:
- NZD leads, CHF lags on the day
- European equities lower; E-minis up 0.4%
- US 10-year yields flat at 0.80%
- Gold flat at $1,902.70
- WTI up 1.0% to $38.95
- Bitcoin up 3.1% to $13,419
It was a largely quiet session with little direction in general, as the dollar ebbed and flowed without achieving much from a technical perspective.
The greenback was slightly softer initially but pared losses as European stocks traded lower in the opening hour. But as we move towards North American trading, the dollar is seeing itself fall back again to where it was at the start of the session.
EUR/USD fell from its 100-hour moving average @ 1.1835 to 1.1796 but the 1.1800 level and 200-hour moving average are still holding up, as price now sits at 1.1820 levels.
GBP/USD also eased towards 1.3000 and a test of its own 200-hour moving average but buyers held before seeing price action turn higher towards 1.3040.
USD/CAD was lower around 1.3170 initially but crept back up towards 1.3195 before falling now to test its 200-hour moving average @ 1.3168 amid stronger oil prices.
AUD/USD saw early gains pared from 0.7140 to test its 100-hour moving average @ 0.7117 before recouping the drop towards 0.7130-40 currently.
In short, there was mild dollar momentum to try and push key near-term technical levels but there was little to suggest a major shift in bias for now. Meanwhile, dollar sellers also still have work to do to try and establish a foothold to start the week.
Election focus remains a key consideration and that might keep traders less invested to chase a firm move in the coming days. But just be mindful in case we start to see the market start to lean towards a particular result ahead of 3 November.
