EUR/USD Forecast: Bulls might wait for a break through November highs, around 1.1920

Worries about the continuous surge in new coronavirus cases and its impact on the fragile global economic recovery weighed on investors' sentiment. This, in turn, drove some haven flows towards the US dollar and exerted some downward pressure on the EUR/USD pair through the first half of the trading action on Thursday. However, expectations of further monetary easing by the Fed, along with a fresh leg down in the US Treasury bond yields kept a lid on any runaway rally for the USD.

The pair managed to find decent support near the 1.1815 region and gained some traction following the release of rather unimpressive US macro releases. In fact, the US Initial Weekly Jobless Claims unexpectedly rose to 742K during the week that ended November 14 and the previous week's reading was also revised higher to 711K. Separately, the Philly Fed Manufacturing Index came in at 26.3 for November as compared to 22 expected, though marked a notable fall from 32.3 previous.

Apart from this, a late recovery in the US equity markets further undermined the safe-haven greenback and provided an additional boost to the major. The USD lost some additional ground after the US Treasury Secretary Steven Mnuchin told the Federal Reserve to return money earmarked for pandemic relief for struggling businesses, nonprofits and local governments. Mnuchin's decision added to market anxiety about the broader economic growth and prompted some fresh selling around the greenback.

The pair rallied around 65-70 pips from daily swing lows and finally settled near the top end of its daily trading range. The momentum extended through the Asian session on Friday, pushing the pair back closer to the top end of its weekly trading range. Friday's economic docket features the releases of German Producer Price Index for October and the EU Consumer Confidence for November. The data will be looked upon for some impetus amid absent relevant market-moving economic releases from the US.

Meanwhile, the anti-risk flow could extend some support to the buck and continue capping the upside for the major, at least for the time being. This makes it prudent to wait for some strong follow-through buying before traders start positioning for a further near-term appreciating move.

Short-term technical outlook

From a technical perspective, any subsequent move up is likely to confront resistance near monthly swing lows, around the 1.1920 region. A sustained move beyond will be seen as a fresh trigger for bullish traders and push the pair back towards reclaiming the key 1.2000 psychological mark. Some follow-through buying beyond YTD tops, around the 1.2010 region, should pave the way for an extension of the near-term upward trajectory. The pair might then accelerate the momentum towards the 1.2065-75 intermediate hurdle en-route the 1.2100 round-figure mark.

On the flip side, immediate support is now pegged near the 1.1850 horizontal zone. This is followed by the overnight swing lows, around the 1.1815 region and the 1.1800 mark. Failure to defend the mentioned support levels might prompt some technical selling and turn the pair vulnerable to slide further towards last week’s swing lows around the 1.1745 region. A convincing breakthrough will negate any near-term bullish bias and set the stage for a further near-term depreciating move, possibly towards testing the 1.1600 mark.