- EUR/USD loses further momentum and retreats to the sub-1.18 area.
- German Economic Sentiment surprised to the downside in November.
- Investors’ focus remains on US politics, pandemic.
The single currency extends the weekly leg lower and forcs EUR/USD to break below the 1.18 mark and print fresh weekly lows.
EUR/USD offered on downbeat ZEW, USD-buying
EUR/USD loses ground for the second session in a row and extends the pessimism seen at the beginning of the week on the back of further recovery in the greenback and disappointing figures from the German docket.
Indeed, measured by the ZEW survey, the German Economic Sentiment eased to 39.0 for the month of November (from 56.1). The same trend was observed in the broader euro area, where the Economic Sentiment receded to 32.8 (from 52.3).
Furthermore, the dollar continues to regain ground lost following last week’s sell-off and manages at the same time to bounce further off Monday’s monthly lows near 92.00 the figure soon after Pfizer’s (NYSE: PFE) news hit the markets.
Later in the US data space, the NFIB Index is due followed by the IBD/TIPP Index, JOLTs Job Openings and speeches by FOMC’s Quarles and Brainard.
What to look for around EUR
EUR/USD quickly reversed Monday’s test of the area beyond the key barrier at the 1.19 yardstick, as investors continue to digest the recent news regarding Pfizer’s COVID-19 vaccine and the dollar extends its rebound further. In the very near-term, EUR/USD is expected to remain under scrutiny on USD-dynamics mainly coming from the elections and the progress of the pandemic. 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 losing 0.12% at 1.1798 and faces the next support 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). On the other hand, a break above 1.1920 (monthly high Nov.9) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1).
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