The month of October has been a good one for those bidding the EUR/USD. Rates are up more than 200 pips on the hopes of an orderly Brexit and forthcoming dovish FED policy. While it is difficult to argue that the Euro is a better choice for your portfolio than the Greenback, 30-day sentiment has been largely positive. 

Today has featured a moderate U.S. economic calendar. The sole highlight was the short-term U.S. Treasury Auctions for the 3 and 6-Month T-Bills. Surprisingly, the recent downturn in yields took a modest break:

Event                                                  Actual   Previous

3-Month T-Bill                                    1.62%       1.63%

6-Month T-Bill                                    1.61%       1.60%

In light of last week’s strength in U.S. equities, it isn’t a huge surprise that today’s bond yields showed a bit of stability. This trend, as well as the entire yield curve, will be key items to watch as we enter the home stretch of 2019.

EUR/USD Challenges Downside Support

In a Live Market Update from early last week, I outlined a long scalping trade recommendation from just above the Current Wave 38% Retracement. The buy proved to be a quick success. However, rates continue to test downside support and are threatening to enter correction.

Overview: The key level to watch for the EUR/USD 1.1100. If we see a daily close above the 1.1100 handle, look for rates to drive north toward the Spike High (1.1171). 

On the central banking front, today marked Mario Draghi’s delivery of his farewell speech as ECB Chairman. There wasn’t much regarding policy in his comments, but the strength of the EUR as a global currency was emphasized. 

Draghi’s comments did little to drive participation to the forex, as the big news today was the Brexit extension and potential British snap election. For now, it looks like early December may send U.K. voters to the polls and 31 January will be the latest in a string of Brexit “final” deadlines.