EUR/USD loses the grip and tests 1.1840 ahead of data

EUR/USD corrects lower and hovers around 1.1840 on Thursday.
US politics, stimulus chat, data drive the mood around the pair.
EMU’s flash Consumer Confidence, US Claims in the limelight.

Pablo Piovano FXStreet

The single currency struggles for direction around the 1.1850/40 band early in the European morning.

EUR/USD focused on data, risk trends

EUR/USD sees a mild correction from recent tops around 1.1880 in the wake of the opening bell in Euroland on Thursday and amidst a renewed pick-up in the risk-off mood, particularly in response to stalled discussions around another US fiscal stimulus bill.

In the meantime, the focus of attention remains on the advance of the second wave of the coronavirus pandemic and its effects on the economic recovery, all in light of renewed restriction measures and partial lockdowns in several countries/major cities in Europe.

In the euro docket, the European Commission (EC) will publish its Consumer Confidence gauge for the current month (-15.0 prev.). Earlier in the session, the German Consumer Climate tracked by GfK deteriorated to -3.1 for the month of November.

Across the pond, weekly Initial Claims take centre stage along with Existing Home Sales and the speech by FOMC’s T.Barkin.

What to look for around EUR

EUR/USD extends the bounce off last week’s lows in the 1.1690/85 band and already navigate in multi-week peaks well above 1.1800 the figure. The outlook on EUR/USD remains positive and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), the so far cautious stance from the ECB and the solid position of the EMU’s current account. In addition, the probable “blue wave” following the US elections is deemed as a negative driver for the greenback and carries the potential to lend extra legs to the pair in the longer run.

EUR/USD levels to watch

At the moment, the pair is losing 0.13% at 1.1841 and faces the next support at 1.1688 (monthly low Oct.15) followed by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9). On the other hand, a breakout of 1.1880 (monthly high Oct.21) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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