EURUSD Holds Onto Gains with European GDP Near Expectations
EURUSD was trading flat on Friday as European GDP came in near expectations. The dollar is also under some pressure as virus cases continue to surge in the United States.
GDP for third quarter was a second estimate with both numbers only 0.1% lower than expectations. The quarterly gain in the economy was 12.6% and the year-on-year figure came in at -4.4%. The numbers marked a strong rebound from the -11.8% print in the second quarter but the problem for the economy is the current lockdowns in Europe which will undoubtedly lead to poor numbers for the fourth quarter. Traders are now looking for data sets that are further out.
TheU.S. saw a record 150,000 new virus cases on Thursday, which was a record high, while Joe Biden has claimed that he will put the country into a 4-6 week lockdown as soon as he gets into the Oval Office. Stimulus talks have now stalled in the U.S. and the dollar could still be vulnerable if the virus continues with no safety net for the economy in the event of a lockdown. If Biden did get in then a large stimulus package would be the start of a big-spending plan and traders are already expecting this.
This afternoon sees the release of Michigan Consumer Confidence figures with the market expecting a read of 82 versus last month’s 81.8. A positive consumer sentiment would help the U.S. dollar but it seems that it has bigger picture concerns to drive the EURUSD pair in the near-term.
EURUSD Technical Outlook
EURUSD was rejected at the 1.1900 level and found support at the 50-day moving average. The pair should now attempt another move to the resistance level. A second failure would see the pair drop again and could go as low as 1.1610. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.