As the Presidential election date approaches, the US dollar is expected to continue to demand demand as markets remain alert to the increased risk of cases of Coronavirus infection, particularly in the United States (US) and Europe in the latest wave.
The global Covid-19 case was confirmed to reach 43 million while the death toll has recorded 1.15 million casualties. Very worrying!
The recent rise in cases of infection has forced some European countries to tighten restrictions on movement and limit economic activity.
The US, Russia and France recorded the latest highest daily cases for the second wave of pandemics. In Italy, restaurants and bars are instructed to operate until 6pm only while Spain has announced a national emergency.
Although media reports on the AstraZeneca vaccine proved effective after use in the elderly and British hospitals were instructed to provide the vaccine as early as next month, it still failed to restore market sentiment.
The Euro currency is still recovering from a slump earlier in the week while the US dollar will gain an advantage over this week's risky market environment.
On the price chart for the EUR / USD pair, it can be seen that the price movement at the beginning of the week is quite flat but shows a bearish pattern.
Prices that fall below the Moving Average 50 (MA50) barrier level within the 1 hour time frame of the price movement give an early signal for a bearish trend.
A lower decline is seen to re-test the RBS zone (resistance become support) at 1.18000.
A clearer bearish trend on the EUR / USD chart will push the price back to the support zone around 1.16900.
On the other hand, if market sentiment this week supports a price hike, the resistance zone of 1.19000 will be the main focus that investors will also evaluate the price reaction.
