The EUR / USD pair remains under strong pressure and today it is located in the area of yesterday's lows.
In recent days, the trend towards strengthening of the American currency prevailed in the market. Demand for the US dollar rose amid increased economic risks due to the active spread of the second wave of the coronavirus pandemic and reports that two companies at once have suspended testing of the COVID-19 vaccine. Investors see the dollar as a defensive asset amid growing uncertainty. Demand for the euro, pound and other G7 currencies dropped significantly.
Uncertainty related to Brexit puts additional pressure on the European currency. At the EU summit, the leaders of the countries of the union stated insufficient progress in the negotiations and called on the UK to intensify the negotiation process. Today, EU representative Michael Roth was even more categorical. He stated that the parties have not made any progress in negotiations over the past month. The EU wants to strike an agreement with the UK, but not at any cost.
Brexit is a key topic in Europe today. Comments by EU leaders, especially Boris Johnson, following the summit may cause strong fluctuations in the European currency and the GBP.
Data on the consumer price index for September will be also published today in Europe. In the US, the focus will be on the September retail sales report.
Buyers are struggling to hold important support at 1.1700. So far, they have succeeded, so the currency pair retains good chances of recovery to the 1.1730-1.1750 area. But, if the level of 1.1700 is broken, the EUR / USD pair may fall to local minimums at 1.1635.
· Resistance levels: 1.1730, 1.1750, 1.1800.
· Support levels: 1.1700, 1.1635, 1.1600.
The main scenario - a rise to 1.1730 and a renewed downward movement.
An alternative scenario - a breakdown of the level of 1.1730 and growth to 1.1750.
The current fundamental outlook is neutral. We consider shorts from the level of 1.1750.