EUR/USD comes under pressure and retreats to 1.1850
|- EUR/USD’s upside failed once again just below 1.1900.
- ECB’s De Guindos expects a soft scenario for Q4.
- EMU’s flash Consumer Confidence comes up later on Friday.
The single currency gives away some of Thursday’s gains vs. the dollar and now drags EUR/USD to fresh daily lows in the mid-1.1800s.
EUR/USD still looks capped by 1.1900
EUR/USD extends the erratic performance in the upper end of the weekly range although still unable to re-test/surpass the tough barrier at 1.19 the figure.
Investors continue to gauge the progress of the pandemic vs. potential effective vaccines and the impact on the incipient recovery and growth prospects for the next months.
In addition, cautiousness is growing bigger among market participants, as the December ECB event looms closer (with the rising likelihood of extra stimulus to be announced) and political jitters commenced to insinuate in the Old Continent with the EU Recovery Fund and vetoes from Hungary and Poland taking centre stage.
Earlier in the session, ECB’s Luis De Guindos hinted at the idea that the economic activity could come in flat or even negative during the October-December period.
In the euro docket, the European Commission (EC) will publish its Consumer Confidence gauge for the month of November later in the session.
What to look for around EUR
EUR/USD once again failed to retest - let alone surpass - the 1.1900 level despite the favourable context in the current week. In the very near-term, however, EUR/USD is expected to remain under scrutiny on the back of the impact of the pandemic on the region’s economy and developments around the Recovery Fund. In addition, the dovish stance from the ECB and the potential announcements of extra stimulus in December also cap potential gains in the pair.
EUR/USD levels to watch
At the moment, the pair is losing 0.12% at 1.1858 and faces the next support at 1.1745 (weekly low Nov.11) followed by 1.1709 (Fibo level of the 2017-2018 rally) and finally 1.1602 (monthly low Nov.4). On the upside, a break above 1.1920 (monthly high Nov.9) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1).
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