The EUR/USD pair is wavering today as traders wait patiently for the election results of the run-off election in Georgia. The EURUSD pair is trading at 1.2267, which is slightly higher than yesterday’s low of 1.2230.
What happened: The biggest news yesterday was the global manufacturing PMI released by Markit. The data showed that the overall manufacturing PMI increased in the United States amid the pandemic. The European PMI missed the overall estimates though.
The EUR/USD is also reacting to the decision by some European countries like Germany to extend their national lockdowns as the number of coronavirus cases continues to rise. The country will have a lockdown for the next four weeks, which could hit the services sector particularly hard.
What else: The biggest catalyst for the EURUSD will be the runoff election in Georgia, where Democrats and Republicans are facing off. The outcome of this election will have an immediate reaction to the pair. If Democrats flip the senate, the pair could rise as hopes of more stimulus rise. However, if Republicans retain control, it could lead to more gridlock, which will be negative for the EUR/USD pair.
EUR/USD technical outlook
On the four-hour chart, we see that the EUR/USD pair has formed a rising channel that is shown in blue. The price remains slightly above the short and long term moving averages.
Therefore, there is a possibility that the pair will remain at the current range during the European and American sessions today before moving sharply tomorrow as the election results stream-in. As such, the key support and resistance levels will be 1.2200 and 1.2350.
EURUSD technical chart