- EUR/USD has been moving higher amid vaccine and US transition hopes.
- Germany's extended "lockdown light" is limiting larger gains.
- Black Friday's four-hour chart is painting a bullish picture.
Black Friday is here and the euro may seem like a bargain – if it were not for Germany's coronavirus situation. Europe's largest economy recorded its one-millionth COVID-19 case, active infections remain high and the curve is not bending lower. Chancellor Angela Merkel and regional leaders agreed to extend the lockdown through December 20 and easing could have to wait for after Christmas.
While France and Spain suffered worse second waves, their polities have successfully bent down the curve and are reopening. Overall, covid cases are falling in the EU while they continue rising in the US.
Source: FT
Americans have been gobbling turkeys for Thanksgiving amid a rapid spread of the disease, with yet another record in hospitalizations, above 90,000 as of Thursday. However, markets are encouraged by President Donald Trump's comments that he will leave the White House if President-elect Joe Biden wins the Electoral College.
Trump continued floating unsubstantiated claims of fraud, accusations that courts have been dismissing. Biden is set to present his economic team next week, with former Fed Chair Janet Yellen designated as Treasury Secretary.
Investors remain hopeful that vaccines will be approved soon, shrugging off confusion about the AstraZeneca/University of Oxford figures. The project reported an efficacy rate of 90% under a lower dose regimen, yet this encouraging news was later mired by an admission that this variant of the Phase 3 trial was made by accident. Moreover, it was given only to people under 55 years old.
While more data is awaited from AstraZeneca, regulators in the UK are likely to push through with approving the immunization scheme. In the US, the Pfizer/BioNTech effort awaits authorization.
Overall, markets are cautiously optimistic and this atmosphere favors gains for EUR/USD. On the other hand, Germany's virus situation is curbing the euro's gains.
The economic calendar is nearly empty, leaving room for covid and political headlines to rock markets on Black Friday.
EUR/USD Technical Analysis
Euro/dollar continues benefiting from upside momentum on the four-hour chart and the Relative Strength Index is below 70 – outside overbought conditions. The world's most popular currency pair is also holding up above the 50, 100 and 200 Simple Moving Averages.
Bulls remain in full control amid the upward movement.
Resistance awaits at Thursday's peak of 1.1940, the highest since September. It is followed by 1.1965 that played a role back then, and by the 2020 top of 1.2010.
Some support is at 1.1920, which was a swing high in early November. It is followed by 1.1895, a stubborn cap later in the month, and 1.1850.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD stays near 1.0800 after upbeat US data
EUR/USD stays under modest bearish pressure and trades near 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.