After displaying a buoyant behavior over the last days, the EUR/USD forex market finally started to pull back this morning, when it was trading at 1.175, still not far from September 2018, when it reached its highest point.
As a side note, the Pound went against the trend in the United Kingdom, continuing to strengthen on hopes that a UK/US trade deal can finally be agreed upon. Also, US markets were expected to open a bit lower today, despite the government’s announcement regarding a new relief plan, in an attempt to boost the economy.
EUR/USD’s strong movement ends
Ever since the coronavirus outbreak, the EUR/USD pair has been languishing, to a lot of traders’ surprise. However, over the last days – specifically, after the EU rescue fund deal was agreed last week – aided the pair to grow with each day. This happened to the bullish form of those trading in the market, sending the pair to new highs it hasn’t seen since September 2018.
But things changed a bit today, showing signs of a slight retreat, thanks to a stronger United States Dollar and a weaker Euro.
GBP/USD market reverses the overall movement of the market
Even though COVID-19 cases keep rising, thus affecting the economic recovery in the USA, there are still hopes for another stimulus package or around $1 trillion. If this happens, it will boost the USD back to life, following many days of being left behind by other major forex currencies.
Despite the USD managing to regain a certain degree of strength on the premise of a possible Fed stimulus package, it still lost ground to GBP which, in contrast, climbed higher in trading today, going above 1.29. Forex traders, as well as market analysts, believe that this happens due to the hopes that both the United States and Great Britain can reach a trade deal with both of them are otherwise looking forward to seeing it becoming reality.
A potential trade deal could reach a value of several hundred billion USD, hence the interest regarding it. Lately, talks have been advancing between the two sides and the second round of negotiations is expected to take place this week, with everybody being hopeful to conclude sooner rather than later.