EUR/USD rate continues to climb up as more and more problems occur in the United States. Yesterday, the Democratic Party officially nominated Joe Biden as their candidate for the upcoming US presidential elections, and he will compete Republican's candidate, US President Donald Trump, in the seat. The election will be held on November 3 this year.

Although the probability of Biden's victory is quite high, it is unlikely to add stability to the US dollar, which is already experiencing a number of problems with uncertainty and high volatility. It will also lead to political uncertainty, mainly because Biden is unlikely to adhere to the policies pursued by Trump. Thus, it is clear that whoever wins in the election, the US dollar will suffer.

In the meantime, the collapse of the dollar yesterday can be linked to the recent statement of US Treasury Secretary Steven Mnuchin, who said that there was no progress in negotiations between Republicans and Democrats with regards to a new aid package. A few weeks ago, Mnuchin said the opposite, but so far, no talks nor resumption of negotiations have been made yet on the issue.

One of the stumbling blocks in the creation of the package was the disagreements on funds as Democrats are seeking a $ 3.5 trillion package, while Republicans see little need for it. Most recently though, the Democrats have announced their readiness to reduce the size of the package to $ 2 trillion, but the presidential administration is aiming to accept an aid package in the amount of only $ 1 trillion. However, they also signaled that they could raise this bar if necessary.

Unfortunately, the Democrats are adamant on their proposed amount, so until now there has been no consensus on the issue. Nonetheless, the new package will be aimed at mitigating the economic impact of the coronavirus pandemic.

As for the rate of the EUR / USD pair, the strong bullish mood may continue today, on the grounds of a breakout and consolidation above the resistance level of 1.1963. Such will push the quote to the highs of 1.2000 and 1.2055. But if the quote undergoes a downward correction instead, long positions may be opened after the price passes the support level of 1.1885. Bulls will try to defend in the price level of 1.1920, but this will be optimal given the good inflation data in the eurozone. A breakout from the support level of 1.1885 will quickly push the quote to the lows of 1.1830 and 1.1780.

With regards to macroeconomic statistics, data in construction in the United States was published yesterday, which, according to the report, rose 22.6% in July compared to June. It is to about 1.496 million homes per year. The lifting of quarantine measures and easing of social distancing, together with a return to normalcy, has a positive effect on the indicator, especially given the record low interest rates that are fueling demand for housing. The Economists expected the index to grow only 4.6%, and amount to 1.24 million a year. Issued building permits also increased by 18.8% in July compared to June, and to 1.495 million per year.

Retail sales in the US also rose 1.4% over the week of August 9-15, and declined 5.3% over the same period in 2019, according to the report of the Retail Economist and Goldman Sachs. Meanwhile, Redbook reported that US retail sales jumped 2.8% in the first 2 weeks of August, but fell 3.1% per annum.