- EUR/USD remains bid and retakes the 1.1850 area.
- Democrat Joe Biden keeps the gap vs. President Trump.
- US Nonfarm Payrolls will grab all the attention later in the US calendar.
The buying interest around the single currency remains well and sound for yet another session and pushes EUR/USD to fresh 2-week highs in the 1.1850 area on Friday.
EUR/USD looks to elections, data
EUR/USD advances for the fourth consecutive session and almost fully recovers last week’s sell-off. In fact, spot gains more than 2 cents since Wednesday’s monthly lows in the 1.1600 neighbourhood, always on the back of the strong improvement in the risk complex.
In fact, riskier assets extend the rally against the backdrop of rising hopes of a Biden win, with the vote counting process is still underway in six states, including Pennsylvania and Georgia.
In the meantime, the better mood in the risk complex appears to have eclipsed the recent Autumn 2020 Economic Forecast release, where the region is now expected to contract 7.8% this year and expand 4.2% in 2021.
In the euro docket, the French trade deficit shrunk to €5.8 billion in September, Spanish Industrial Production contracted 3.4% on a year to September and Italian Retail Sales dropped at a monthly 0.8% in the same month.
The US calendar looks far more interesting with the publication of the October’s Nonfarm Payrolls (600K exp.).
What to look for around EUR
EUR/USD extends the rally to 2-week highs well beyond 1.18 the figure amidst the favourable environment surrounding the risk-associated universe. In the very near-term, EUR/USD is expected to remain under scrutiny on USD-dynamics mainly coming from the elections and key data releases. On the more domestic front, the euro appears propped up by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), although the now more dovish stance from the ECB prompts some caution when comes to bullish attempts. As usual, the euro still looks supported by the solid position of the EMU’s current account.
EUR/USD levels to watch
At the moment, the pair is gaining 0.29% at 1.1855 and a break above 1.1880 (monthly high Oct.21) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18). On the downside, the next support aligns at 1.1781 (55-day SMA) followed by 1.1709 (Fibo level of the 2017-2018 rally) and finally 1.1602 (monthly low Nov.4).
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