The EUR/USD pair is pointing upwards today ahead of a potential Brexit deal. The weaker US dollar and economic data are also having an impact on the EURUSD pair. It is trading at 1.2200, which is higher than yesterday’s low of 1.2173.
What happened: Many reputable media sources like the Financial Times, Bloomberg, and Telegraph have confirmed that the EU and UK have reached a Brexit deal. The deal came about after the UK lowered its fisheries demand and after the EU softened its approach on fair trading practices. A deal will benefit the two sides as they continue going through the Covid recession.
What about US data: The EUR/USD is also rising due to the overall weaker US dollar after a series of weak economic data. Reports released yesterday showed that personal income and spending fell in September. The same was true for other areas like existing and new home sales and durable goods orders.
Looking ahead, today will be a relatively calm day with focus remaining solely on Brexit. Indeed, many markets in Europe will be closed while in the United States, markets will open until midday.
EUR/USD technical outlook
On the two-hour chart, we see that the EURUSD pair is above the ascending blue trendline. It has also moved above the 25-day moving average while the Relative Strength Index (RSI) has continued to rise.
Therefore, the path of least resistance for the pair seems to be higher. If this happens, the pair will possibly aim for 1.2250. On the flip side, a move below the ascending trendline at 1.2165 will invalidate this trend.
EURUSD technical chart