• The US media called Joe Biden the US presidential election winner.
  • The world reports record new COVID-19 cases, the second wave much worse than anticipated.
  • EUR/USD remains neutral in the mid-term, bulls may try to retest the 1.2011 year high.

The EUR/USD pair hit a two-month high of 1.1919 this week but ends it in the red a handful of pips above the 1.1800 figure.  The pair touched the mentioned high on the back of weekend news, as the media called Joe Biden the US presidential election winner. It’s a long-accepted tradition, but it has no legal background.

US President Donald Trump has refused to concede his rival the victory and moved on with legal challenges. And while most have assumed Biden will be the next habitant of the White House, nothing is set and done. States have up to December 8 to resolve election disputes and provide official results.

Sentiment lead by coronavirus-related headlines

Coronavirus vaccine news shocked markets on Monday, as US Pfizer pharmaceuticals alongside German biotech firm BioNTech announced their COVID-19 vaccine is more than 90% effective in preventing contagions. Wall Street soared to all-time highs, and the dollar rallied.  As the week developed, however, the sentiment turned sour.

The dismal mood came as the ongoing pandemic reached levels of contagions and deaths not seen since April in Europe, while the US reported record highs daily basis. News on vaccines progress released early in the week faded, as the speculative interest now believes that a steeper economic setback will come before there’s a chance to grow.

Lockdowns and curfews in Europe have become the new normal, and what seems more worrisome, the US is following the same path amid a stressed health system. So far, the US has implemented punctual curfews as the decision is in the head of governors. The US has an economic advantage over the Union, as the American economy keeps running while tough restrictions hit Europe. Could this change in the near-term? It could if Joe Biden actually becomes the next US President on January 20.

Dismal sentiment amid fresh restrictions

Data wise, it was quite a light week, although macroeconomic numbers reflected the downbeat mood. The German ZEW Survey on Economic Sentiment plunged in November to 32.8 from 63.7 for the EU. Industrial Production in the Union fell by more than anticipated in September, while the Gross Domestic Product in the Old Continent was downwardly revised from 12.7% to 12.6% in Q3.

In the US, figures were a bit better, as Initial Jobless Claims continued to shrink early November, down to 709K in the first week of the month. Inflation, however, was confirmed at 1.6% YoY in the country, slightly worse than anticipated. Finally, the preliminary estimate of the Michigan Consumer Sentiment Index came in at 77, much worse than anticipated, exacerbating the dismal mood.

Next Tuesday, the US will publish October Retail Sales, foreseen up a modest 0.5%. Otherwise, the macroeconomic calendar will include little of interest. The focus will remain on US political developments and coronavirus-related headlines.  

EUR/USD technical outlook

The EUR/USD pair has set a higher high for the week and a higher low, which somehow limits the chances of a steeper decline. In the weekly chart, the pair is holding above a bullish 20 SMA, which advances beyond the larger ones. The Momentum indicator lacks directional strength around its midline, with a modest bearish slope, while the RSI also turned marginally lower but around 57. Technical indicators are reflecting the absence of demand instead of suggesting an upcoming slide.

The daily chart offers a neutral stance, as the pair is barely holding above a flat 20 DMA, while the larger ones maintain modest bullish slopes below it. Technical indicators seesaw around their midlines, reflecting the ongoing range-trading.

The main resistance area is still 1.1910/20, with a break above it, exposing the year high at 1.2011. An intermediate stop comes at 1.1960. The weekly low at 1.1745 provides support en route to the 1.1640/60 price zone.

EUR/USD sentiment poll

Bulls outpace bears according to the FXStreet Forecast Poll leading the way in the three time-frame under study. However, the pair is seen holding below 1.2000, on average. The bullish sentiment is stronger in the one-month perspective, while bearish interest diminishes as time goes by.

The Overview chart shows that moving averages remain directionless, although most targets accumulate above the current level, with more experts now forecasting gains beyond the ECB’s line in the sand at 1.20.

Related Forecasts:

GBP/USD Weekly Forecast: Even Boris cannot break the pound's power play amid Britain's covid edge

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


Recommended Content

Editors’ Picks

EUR/USD regains 1.0900 ahead of Powell speech

EUR/USD regains 1.0900 ahead of Powell speech

EUR/USD is recovering above 1.0900 in the European session on Monday. The pair finds demand, as the US Dollar rebound stalls. The focus remains on US politics and Fedspeak looking ahead.

EUR/USD News

GBP/USD holds below 1.3000, as focus shifts to Powell speech

GBP/USD holds below 1.3000, as focus shifts to Powell speech

GBP/USD pares losses but stays below 1.3000 in European trading on Monday. The US Dollar struggles after a positive start, as traders digest the assassination attempt on ex-US President Donald Trump. Powell's speech is next on tap for the pair. 

GBP/USD News

Gold price clings to gains near $2,400 on firm Fed rate-cut bets

Gold price clings to gains near $2,400 on firm Fed rate-cut bets

Gold price holds gains to near $2,400, driven by growing speculation for Fed rate cuts in September. Softer-than-expected US inflation for June indicated that price pressures are on course to return to 2%.

Gold News

Bitcoin price sets for a rally following a breakout above the descending trendline

Bitcoin price sets for a rally following a breakout above the descending trendline

On-chain data suggests that miners' selling activity is decreasing, indicating a bullish move ahead. US spot Bitcoin ETFs registered $1.047 billion in inflows last week. Bitcoin Coinbase Premium Gap is increasing, suggesting that whales are intensifying their accumulation.

Read more

Trump assassination attempt boosts his chances of winning November election

Trump assassination attempt boosts his chances of winning November election

Donald Trump got this close to being assassinated this weekend while he was giving a speech in an election rally. He was lucky that the bullet only grazed his ear, but he showed his resilience by demonstrating strength and defiance after being shot.

Read more

Majors

Cryptocurrencies

Signatures