Risk-Aversion Dominates The Market Ahead Of Major Risk Events
The U.S. dollar received less attention as investors turned risk-averse in the light of the latest twist in the U.S. election, causing uncertainty about the outcome of the looming vote. The euro still remained within a narrow trading range and none of our entries was triggered Monday. In order to expect an increase in momentum we now wait for an upside break above 1.0980 or, on the other side, a downside break below 1.0935.
Unlike the non-moving euro, the British pound rose to a high of 1.2249 as Bank of England Governor Mark Carney announced that he will remain in the role until 2019. Carney’s decision to stay at the BoE was seen as a positive for the U.K. even though the pound remains vulnerable to further losses in the medium term. The GBP/USD trades sideways between 1.2275 and 1.21 ans as long as there is no breakout of this range we will have to wait.
The U.K. PMI Manufacturing is scheduled for release at 9:30 UTC but this report is unlikely to have a dramatic impact on the pound.
More important will be the ISM Manufacturing index, due for release at 14:00 UTC which should affect the performance of the U.S. dollar provided that the report surprises to the upside.
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