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The American dollar was the biggest loser last week, plummeting against all of its major rivals. EUR/USD advanced to 1.1890 retaining substantial gains at the end of the week as the US presidential election blurred pandemic chaos. The EUR/USD pair has the risk skewed to the upside, according to FXStreet’s Chief Analyst Valeria Bednarik. 

Key quotes

“It seems that Joe Biden will be heading into the White House in 2021. The dollar slump is the result of investors pricing in a divided government.”

“The pandemic keeps taking its toll globally. The US reached the sad record of reporting over 100K new coronavirus cases in one day. On Thursday, the world reported over 600K new contagions and roughly 8,700 deaths. Stocks rallied on election stalemate, but risk sentiment could soon suffer a U-turn, when the election is officially decided or when coronavirus figures and growth move back to the front-line. Whenever elections get defined, there’s a good chance that the country will finally get a second stimulus package.”

“Economic indicators released last week were generally upbeat, but also indicated that the most relevant economies are far below pre-pandemic levels. The path to recovery is slow, and with the latest COVID-19 figures seems it will take even longer.”

“The immediate resistance level is 1.1915, followed by 1.1960 and the year high at 1.2011. An approach to this last will likely spur profit-taking and result in a large retracement. Supports, on the other hand, come at 1.1840 and 1.1790. Below this last one, the EUR/USD pair could enter a corrective decline towards the 1.1700 price zone.”