The stock market has been ambitious in its attempt to eliminate September's retracement and take the "blue wave" into account but the forex market has been more conservative recently in terms of restoring risky bets. However, when it comes to the stock market, each and every scenario out there eventually boils down to the smart money, which cannot but affect the international currency market. Still, there are many questions to be answered yet, which makes it really difficult to make more or less clear predictions.
EUR/USD has been testing the resistance level at 1,18, with no luck so far. However, we don't see any market intensions to get back to 1.17. In a broader sense, the summer goal of reaching 1,20 is still valid. The global recovery mode is still underway, backed by monetary expansion around the world in general and the United states in particular. This means financial investments in riskier assets. What changed in September is the destiny of the financial package amid the nearing U.S. presidential elections. The package is likely to be introduced in January 2021. But it may also be introduced this year. There is no certainty about that since various reports keep coming from the White House on a daily basis.
At first President Trump made a call to disrupt the trade talks. Then he announced his intent to sign the bills related to partial budgetary spending. Yesterday, he god back to advocating a bigger package. They say that Trump got scared of the Wall Street's reaction, or maybe the "blue wave", i.e. the growing support of the Democrats. Anyway, EUR/USD has 3 weeks left. Under such circumstances, few traders and investors want to risk big. As a result, October may bring a further flat market, NordFX experts assume.
GBP/USD has been showing us the same picture. The dollar side of the market has been affected by the U.S. presidential elections, which are scheduled for November, 3rd. However, the current situation in the United Kingdom doesn't make the investment life easier as well. The Brexit talks had an unofficial deadline of September, 15th, which eventually turned out to be Boris Johnson's effort to affect the other side involved in the talks. But the EU negotiators didn't buy that trick. Frankly speaking, both sides want an agreement but none of them wants to overpay. Under such circumstances, the international community of traders and investors has been cautious about any information related to the Brexit talks, which is why any related rumors and leaks cause minor reactions.
