The currency markets are expected to be calm during Columbus Day, with little movement anticipated for major pairs such as EUR/USD, EUR/GBP, and GBP/USD. This is due to Japan, Canada, and the United States observing the holiday, resulting in subdued trading activity. The lack of volatility may provide traders with a brief opportunity to reassess their positions without the influence of significant market events or economic data releases.
The EUR/USD pair continues to face downward pressure, sliding towards last week's low of $1.0900. Traders are closely monitoring this critical support level, as a failure to hold could lead to further declines towards the August low at $1.0882 and the 200-day simple moving average (SMA) at $1.0874. Resistance levels are identified at the October 4 low of $1.0952 and the October 8 high of $1.0997, indicating a challenging environment for the euro against the dollar.
Similarly, the GBP/USD pair is experiencing a bearish sentiment, trading below the 55-day SMA at $1.3077. This SMA has become a key resistance level, complicating the outlook for the British pound. A breach of last week's low at $1.3022 could lead to further declines towards the September low at $1.3002 and the psychological barrier of $1.3000. Traders should remain vigilant as a significant breach of the $1.3000 support level could signal a shift in market sentiment.
The EUR/GBP pair is also showing signs of weakness, reflecting the challenges faced by both the euro and the pound. Traders should closely monitor economic indicators and geopolitical developments that could influence currency movements.
It is important to note that the holiday trading environment may lead to unexpected price movements due to lower market participation and liquidity. Traders should be prepared for potential volatility once the holiday period concludes and market activity resumes.