Is EUR Poised for a Perfect Storm?| Influencer Forex Analysis•Jasper Lo

A bearish engulfing pattern appeared in the final weekly chart of October, indicating weak euro prices. Analysts suggest the euro is staging a perfect storm. I do agree the euro is facing a crisis of slump as several factors have been negative enough to push the currency into a new bear market.

In terms of external factors, the uncertainties in the election and the failure of the White House and the House of Representatives in reaching a relief deal have brought about negative impacts, which weighed on US stocks and sent a sharp rally to the DXY. As a result, the euro bore the brunt of the strong greenback.

In terms of internal factors, the fatal hit to the euro first attributes to the second wave of the pandemic across Europe, which urges countries such as Germany and France to impose emergency lockdowns, resulting in sharp economic losses. The economic data is estimated to be even worse in the future. Besides, although the European Central Bank (ECB) kept interest rates unchanged last week, all members of the ECB had agreed that it was necessary to take action at the next rate, said President Lagarde. In the wake of such a statement, the euro prices plunged to a four-week low.

The next ECB meeting is scheduled for December 10. In this regard, I believe the ECB will not only take action at the next meeting but even undertake more quantitative-easing measures. The ECB may take early action in response to either the bloc‘s pandemic or the economic situation, which put continued selling pressure on the euro. If this week’s US stocks fall steeply because of the turmoil in the country, the euro will be further punished.

Notably, the latest US GDP released last week embraced the strongest rally in history, proving there is a big difference in the economic situation between the US and Europe. The Fed meeting is about to be held this Thursday in addition to the presidential election this week. There seems to be no need nor space for the Fed to take dovish measures amid the strong economic growth. With the election and the Fed's meeting on the way, the DXY has a great chance to climb further this week, a heavier pressure on the euro. Thus the euro is poised for a perfect storm no matter in the short, medium or long term.

[About The Author]

Since 1987, Jasper Lo has been engaged in the financial industry

(forex, futures and gold) for more than 32 years and holds forex R.O.,

securities and futures broker licenses. Mr Lo is an expert in trading

forex, precious metals and commodity futures and an basic and technical

analyst.

Over the years, Mr Lo won many individual and team sales champion

awards, as well as outstanding employee awards. He was invited, as a

guest mentor, to the University of Hong Kong, Guangdong Ocean University

and Guangzhou Jinan University. And he was also appointed as the chief

training consultant by Hantang Securities and Dongguan Securities in

China.

Mr Los experience as guest of honor invited by media including Chinese and English newspapers and columnist:

-Guest of honor invited by TVB New Channels such as Finance Channel, Forex Focus, Global Watch

-Guest of honor invited by Now Finance Channel - Forex Reports

-Guest of honor invited by i-CABLE Finance Info Channel - Forex Opportunities

-Guest of honor invited by ViuTV - Investor Smarter Group

-Columnist of Finance and Forex Market of Ming Pao

-Presenter of Finance and Forex Forecast of Ming Pao

-Presenter of Investment 36 Stratagem and Technical Analysis in 1 Min of Ming Bao Finance

-Appointed lecturer of Ming Pao Investment Seminar and Paid Course

-Author of the best seller Investment 36 Stratagem

-Columnist of Forex Expert, Forex Analyst, Marathon Weekly of ET Net

-Guest of honor of Open Good Morning of ET Net

-Guest of honor of Metro Finance Channel - Market Opening, Instant

Market Fighting, Guangdong-Hong Kong Finance, Finances Power, Market

Analysis

-Guest of honor of New Era of Investment of RTHK

-Columnist of Capital Commodities of Capital Weekly

-Guest Presenter of Wang Guanyi Online Finance Channel - Fund and Commercial Bond

-Columnist of Wealthub Finance and Investment Smart Platform of Enrich Culture

-Guest presenter of Weekly Investment in the World of Enrich Culture