EUR/USD on track to disappoint bulls with a weekly loss, Eurozone GDP eyed
|- Down 0.6% this week, EUR/USD risks invalidating last week's bullish candle.
- The Fed warns economic risks to remain as infections accelerate, risk sentiment weakens.
- An upbeat Eurozone GDP is needed to save the day for the bulls.
EUR/USD has had a tough time this week with market sentiment flip-flopping back and forth on coronavirus and looks set to pour cold water over the optimism generated by the previous week's bullish breakout.
The pair is currently hovering near 1.18, representing a 0.6% decline for the week, marking a weak follow through to the bullish outside week candle created in the five days to Nov. 6.
The bullish candle would be neutralized if the pair ends Friday below 1.1891. As of now, that looks likely as the risk sentiment in the stock markets has weakened on rising coronavirus cases in the US, the world's biggest economy. The new coronavirus infections in the US hit record highs for the second straight day on Wednesday. According to The New York Times, at least 142,755 new COVID-19 cases were reported in the US on Wednesday.
Investors are now worried that the US government would reimpose the economically-painful lockdown restrictions to contain the second wave and pricing out the optimism factored in following the US drugmaker Pfizer's announcement of the coronavirus vaccine's positive results.
On Thursday, the US Federal Reserve Chair Jerome Powell said that while the progress on the vaccine front is welcome news, it does not nullify near-term economic risks from rising virus cases.
However, the common currency will likely pick up a strong bid and print a bullish close above 1.1891 (last week's high) if the preliminary Eurozone Gross Domestic Product (GDP) data for the third quarter, due at 10:00 GMT, beats estimates. That would force markets to scale back dovish European Central Bank expectations.
Technical levels
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