Only the EUR/USD bulls came to their senses thanks to the decision of the British Supreme Court on the illegality of the actions of the country's Prime Minister Boris Johnson to "freeze" the national parliament, as well as the statement by the Bank of France governor Francois Villeroy de Galhau about disagreeing with the recovery of the European QE, as an increase in demand for safe-haven assets made them retreat. Messages about the launch of the impeachment proceedings against US President Donald Trump spurred demand for treasury, yen, franc, and gold.
The pressure on the main currency pair is also exerted by news from the US-China trade front.
The pressure on the common currency pair is also exerted by the news from the US-China trade front.
A day earlier, in a speech at the UN General Assembly, D. Trump criticized Chinese trade policy and said that he would not make a "bad deal" with China. Investors have reacted negatively, given that trade representatives of the two countries are preparing to hold a meeting in Washington in the coming weeks.
At the same time, the US consumer confidence index fell at its fastest pace in nine months, and the high liquidity demand of US banks are negative points for the Euro/USD bears. The demand for the two-week repo deals reached $62 billion and for one-day transactions amounted to $80.2 billion. Its supply reached $30 billion and $75 billion, respectively. The output of these data led to a decrease in the yield of US government bonds. Apparently, investors believe that the Federal Reserve will have to do more than just conduct operations to purchase bonds with an obligation to repurchase them. This increases the risk that the regulator will resume quantitative easing and a wake-up call for the US currency.
However, if the greenback does not look like a monolith, the euro cannot stand firm.
In the Old World, there are increasing calls for helicopter money when the European Central Bank directly buys bonds issued by national governments issued to stimulate economic growth. In this regard, Germany and other EU states have a great opportunity for fiscal stimulus.
Thus, the ECB has exhausted far from its ability to mitigate monetary policy. This trump card sellers of the euro have not yet won back, as many would think. This circumstance, along with the weakness of the eurozone economy and trade disputes, allows the EUR/USD bears to hope in the continuation of the downward campaign, at least to the lower limit of the short-term consolidation range at 1.093-1.1095.