- EUR/USD has been attempting to bounce amid hopes that Trump leaves the hospital.
- The dollar may rise if the president does not return to the White House, yet fiscal stimulus hopes could balance the picture.
- Monday's four-hour chart is painting a mixed picture for the currency pair.
Should I stay or should I go? That is the question for President Donald Trump, who wants to convey an upbeat message about his COVID-19 illness and leave the Walter Reed hospital.
The president's doctors also painted a rosy picture, saying he is improving and may be discharged on Monday. That is pushing the safe-haven dollar down and EUR/USD higher, but that may be temporary.
That positive statement created expectations for an early release – and may face a reality check. Doctors have been scrutinizing the official data and are perplexed. Dr. Sean Conley, the president's personal doctor, said that Trump has been given dexamethasone – a steroid that has proved useful for serious coronavirus cases.
If the president is doing well, why would he need that treatment? And if doctors are throwing the kitchen sink at Patient No. 1, dexamethasone could do harm. In general, steroids suppress fever and also cause an upbeat feeling, sometimes reaching euphoric levels. That could explain Trump's positive video message and his drive-by to greet supporters. Entering an SUV, even with a mask, put his staff at risk of contracting the virus.
See Stocks to surge on Trump's discharge hopes, four reasons why a crash may follow
The good news coming from the hospital is that Trump spoke with Senate Majority Leader Mitch McConnell about the fiscal stimulus bill. Republicans and Democrats got closer to a deal last week, but differences remain – Dems want over $2 trillion and the GOP is ready for $1.5 trillion.
House Speaker Nancy Pelosi expressed hopes of striking a deal on Friday, helping stocks recover from the shock of hearing about Trump's positive coronavirus test. If both sides release optimistic assessments, the greenback could fall.
Investors will also eye the ISM Services Purchasing Managers' Index, which is projected to a minor slide from 56.9 in August to 56.3 in September. The indicator tends to have more impact when it is released ahead of the Non-Farm Payrolls, yet still serves as a forward-looking indicator of America's largest sector.
The jobs report – heavily overshadowed by Trump's news – disappointed with an increase of only 661,000 positions in September, signaling a slowdown in the recovery. It was partially balanced by a positive upward revision of August's numbers.
The jobless rate fell to 7.9% – an encouraging figure, but it may reduce the urge for further stimulus. Moreover, it is essential to remember that the drop in the unemployment rate is a result of a fall in the labor force participation rate.
See US Non-farm Payrolls September Report: The two-tier economy
While the world is closely watching Trump's coronavirus case, infections in Europe continue rising and somewhat limit the common currency's gains. The Spanish capital Madrid – Europe's hardest-hit city – was put under lockdown while the Paris region's alert level was raised to a maximum. COVID-19 cases are also rising Germany, the continent's largest economy.
Markit's Services PMIs for September and the Sentix Investor Confidence may reflect a more cautious mood amid these developments.
Overall, speculation about the president's condition is the main theme, but fiscal stimulus and other events have room to move EUR/USD.
EUR/USD Technical Analysis
Euro.dollar is trading above the 50 Simple Moving Average on the four-hour chart but below the 100 and 200 SMAs. Momentum and the Relative Strength Index are going nowhere fast. All in all, the relatively limited range trading is showing up in these indicators.
Support awaits at 1.1685, which was a swing low last week. It is followed by 1.1625 and 1.1610, support lines from late September.
Looking up, the daily high of 1.1735 serves as immediate resistance. It is followed by 1.1755, a swing high from last week, followed by 1.1770, the October high.
More Who will be the next president? Markets seem to care more about Congress' actions (for now)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD falls toward 1.0500 amid risk-off mood
EUR/USD has come under fresh selling pressure, easing toward 1.0500 in the European session on Thursday. The pair faces headwinds from risk-off flows due to rising geopolitical conflict between Russia and Ukraine and worries over the potential US tariffs on the EU. ECB- and Fedspeak are awaited.
GBP/USD stays pressured toward 1.2600 ahead of US data, Fedspeak
GBP/USD remains pressured toward 1.2600 in European trading on Thursday. The pair's underperformance could be attributed to a risk-aversion market environment. Traders stay cautious amid rife geopolitical tensions ahead of mid-tier US data and Fedspeak.
Gold price extends gains beyond $2,650 amid rising geopolitical risks
Gold price extends its bullish momentum further above $2,650 in Thursday's European session. Gold price risies for the fourth straight day, sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war. US data and Fedspeak are next in focus.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu (SHIB) trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Why Nvidia’s story is far from over
Nvidia delivers another earnings beat: Nvidia exceeded expectations with $35.08 billion in revenue, a 94% year-over-year increase, driven by strong performance in its data center business, which more than doubled to $30.8 billion.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.