On Monday, the Asian stock market shines red, but the currency market is calm. The pound is the strongest on the foreign exchange market. The UK media reports that Prime Minister May has a secret plan that will ensure an agreement on Brexit and will be approved by the parliament. GBP / USD initially jumped to 1.3050 after the report, but then it started to move back and is now at 1,3005. The rest of the market is relatively stable. EUR / USD is staying just under 1.14, where it hit on Friday on press speculation that the ECB is preparing another round of cheap liquidity loans for commercial banks. Since then, however, three sources have told Reuters that nothing like that is planned in the near future.
On Monday, the 5h of November, the event calendar is light in important data releases, but the global investors should pay attention to PMI Services and PMI Composite data from the UK and ISM Non-Manufacturing data from the US. There is a speech from BOC Governor Stephen Poloz scheduled later in the day.
EUR/USD analysis for 05/11/2018:
According to the MNI agency, the European Central Bank is considering implementing a fresh round of TargetedLlonger-Term Refinancing Operation, TLTRO. The prospect of a new loosening of monetary policy hits EUR across the board, but there is no official confirmation from the ECB. Nevertheless, if the information was confirmed, it would be an important turn in the ECB's strategy, especially in the face of EC budget dispute with Italy and the implications for European banks involved in investing in Italian debt.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has briefly broken out above the technical resistance at the level of 1.1444, but then it reversed quickly and currently is trading around the level of 1.1370. The nearest support is seen at the level of 1.1360 and 1.1345, so if the momentum will change from neutral to negative, those two levels will be tested. If, however, the bulls will get back the control over the market and break through the resistance at the level of 1.1444, then the next target for them is seen at the level of 1.1497 and even 1.1533.
