EUR Trading Update on October 21, 2020

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EUR/USD continued to grow towards 1.19000

The euro made a breakthrough to 1.18500 and is now consolidating around that value. The possible resistance upwards is about 1.18800. The maximum target maybe 1.19700 before the next pullback. Growing hopes for additional fiscal stimulus in the US economy, along with the consensus on the “blue wave” in the November elections, continue to weigh and bring the US dollar index (USI) to the level last seen near 92.70 in late September.
Later in the euro package, the focus will be on the participation of ECB C. Lagarde at the ECB. Besides, members of the ECB L Board should speak. De Guindos and P. The number of corona cases in Europe and America is constantly growing, but Europe’s situation is more serious. Irish Prime Minister Micheal Martin has confirmed the country’s return to the highest level of restrictions in the fight against coronavirus, which will last for six weeks. A curfew will be introduced on October 22 in the northern Italian province of Lombardy, considered the “locomotive” of the Italian industry. Belgium could return to the strictest quarantine model if the number of coronavirus patients Ives Van Laethem, one of the best Belgian virologists, did not decrease. The Spanish government is considering several possible measures, including a curfew.
There is nothing significant in the American market today from American economic news.

EUR / CHF resistance zone test

Looking at the chart, the euro is losing strength in front of the Swiss franc and is slowly sliding down. It is currently at 1.07200 with less consolidation, where we expect the decline to the previous bottom of 1.06880 to continue soon. More serious support is at 1.06485.
Comments of the President of the ECB, Christine Lagarde:

• The sweet point is low inflation with a buffer above zero (bar)
• It is a terrible idea for inflation to become negative (tape)

She participates in the ECB event along with chief economist Philip Lane, so the above comments are both of them. For now, the remarks are nothing new, but we will see if there is more of a sense of urgency if price pressures do not improve in the coming months. It is peaceful in Switzerland today and without economic and political news.