Source: Economic Events November 13, 2020 - Admiral Markets Forex Calendar
On Monday, after Pfizer/BioNTech announced that they are on their way to a Covid-19 vaccine that is effective in preventing the virus in over 90% of cases, US yields spiked to their highest levels since March 2020, eyeing the 1.00% mark.
Main reason was certainly that market participants saw chances of a massive fiscal and further monetary stimulus dropping. As a result Gold sold off sharply and a potential sector rotation from growth to value stocks set in.
But what's especially noteworthy: EURUSD saw an initial push above 1.1900, dropping only with a delay of several hours towards and slightly below 1.1800 in the days to come.
That's not just noteworthy, but surprising. The spike higher in US yields and resulting US-Dollar strength can in fact only mean one thing: market participants are still convinced that we are far from returning to "normal", especially from an economic standpoint.
That said, chances of a massive fiscal package to stabilize the US economy and an ultra-dovish approach from the US central bank FED to finance that fresh US debt are probably still on the table, which was underlined by FED chairman Powell last week at the FED meeting on Wednesday.
While the picture in EURUSD remains choppy as long as we trade below 1.1900, but above 1.1600, we will remain positive for the currency pair, expecting a break higher, direct follow through to 1.2000 and a deep run beyond the 1.2000 mark in the 6 to 12 months to come.
Even if we get to see a short-term USD relief rally and break below 1.1600, we consider the region between 1.1400 to 1.1500 interesting, risk-reward wise, and could anticipate our expected break to above 1.2000:
Source: Admiral Markets MT5 with MT5SE Add-on EURUSD Daily chart (from August 07, 2019, to November 12, 2020). Accessed: November 12, 2020, at 10:00 PM GMT. Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the EURUSD fell by 10.2%, in 2016, it fell by 3.2%, in 2017, it increased by 13.92%, in 2018, it fell by 4.4%, and in 2019, it fell by 2.2%, meaning that in five years, it was down by 7.3%.
Discover the world's #1 multi-asset platform
Admiral Markets offers professional traders the ability to trade with MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level than with MetaTrader 4. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5!
Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
- Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.