Euro rises after strong German Q3 GDP data

The euro bounced back against the US dollar after slightly better economic numbers from Europe. In a report earlier today, the German statistics office said that the country’s economy expanded by 8.5% in the third quarter after falling by 9.7% in the second quarter. That reading was better than the expected increase of 8.2%. On an annualised basis, the economy declined by 3.9%, better than the consensus estimate of 4.1%. Further data by the Ifo Institute showed that the current assessment and business climate fell to 90.0 and 90.7, respectively. The decline was nonetheless better than the expected 87.0 and 90.1, respectively. 

Global stocks and crude oil prices rose because of positive vaccine news. This is after major pharmaceutical companies unveiled vaccines that have more than 90% efficacy rate. Yesterday, AstraZeneca said that its vaccine had a 90% efficiency rate when used in small doses. This came a few days after Pfizer and Moderna said that their vaccines had a rate of 95%. These firms are now waiting for regulatory approval, which will lead to vaccinations. Stocks also rose because of the ongoing formation of Joe Biden’s cabinet, which include respected people like Janet Yellen and Tony Blinken.

Gold price remained under pressure today as global risks eased and investors shifted their funds to the better-performing cryptocurrencies. Gold and silver dropped by more than 1% while Bitcoin, Ethereum, and Ripple jumped by more than 1%. That brings the total market cap of all digital currencies to more than $565 billion. According to Bloomberg, analysts believe that the current crypto rally will continue because it is backed by institutional investors. 

EUR/USD 

The EUR/USD price rose to an intraday high of 1.1893, which is substantially higher than yesterday’s low of 1.1800. On the hourly chart, it has moved above the previous ascending white trendline. It has also moved back above the 25-day and 15-day moving averages and is slightly below yesterday’s high of 1.1905. Therefore, the pair may continue rising ahead of the US consumer confidence data.

XAU/USD

The price of gold dropped to an intraday low of 1,813 as appetite for risk eased. On the daily chart, the price moved below the important support at 1,844, which was the lowest level on September 28. The Relative Strength Index (RSI) and the two lines of the Stochastic oscillator have also moved below the oversold level. Therefore, in the short-term, the path of least resistance for the RSI seems lower, with a potential for moving below 1,800.

XTI/USD

The XTI/USD pair rose to an intraday high of 43.56, which is the highest it has been since August. On the four-hour chart, the price has moved above the 25-day and 15-day moving averages while the volatility, as indicated by the Average True Range (ATR) has declined. Similarly, the Relative Strength Index is approaching the overbought level while the price is slightly above the ascending yellow trendline. Therefore, the pair is likely to continue rising, with the next stop being at 45.