EURUSD is trading close to unchanged in the European session as the pair seeks a catalyst for a move above the 1.1900 level. Consumer confidence is released later in the day and that could give the single currency a lift.
Consumer confidence in the Eurozone came in at 15.5 last month, with this release expected to see a dip to 15.5. If the data surprises to the upside then the Euro could get a minor lift, however, traders are looking beyond consumer indicators as lockdown restrictions persist and a weaker fourth quarter is expected from global economies. Germany reported a small slowing in virus cases yesterday which will keep traders on a positive footing that the situation won’t escalate further in the Eurozone.
As the price of the euro edges higher the European Central Bank’s distaste for a strong currency will rise up again. The next meeting of the ECB is on December 10th and if we see the single currency gaining further against the dollar then this could influence the ECB. There is also the potential that a No Deal Brexit would keep the Euro inflated against the pound sterling. Further monetary action is likely by the central bank due to the current lockdowns and this could be guided in order to weaken the euro without showing their hand with a clear intervention in the currency market, which is frowned upon with nations, who have an unwritten rule against such measures.
Brexit talks are ongoing but have hit another snag after one of the team tested positive for the coronavirus, which saw direct talks suspended. Negotiators are continuing to work remotely in order to try and secure an agreement that can be approved and implemented in six weeks. The deal would still have to pass the U.K. and EU parliaments as the two sides bid to avert a move to World Trade Organization rules on January 1st, which would mean tariffs applied to goods traded between them. Britain was able to clinch a deal with Canada this week, which avoided the same scenario as the current deal between the two countries was made via the EU.
The U.S. dollar remains weak as the U.S. election picture is still clouded by uncertainty. Joe Biden has been declared the winner of Georgia after a hand count that followed an audit. The state would have until Friday to certify results that have been submitted by counties. Georgia adds 16 votes to this tally but the Trump campaign is still in the background threatening legal challenges. Republicans have launched around 30 legal challenges and 19 of those lawsuits have been denied, settled, or withdrawn, according to NBC. The state legal option looks to be a dead-end and the race will likely depend on the Supreme Court or the house.
There is no data release for the U.S. dollar today so the recent trend of USD weakness will likely persist into the weekend and a stronger European consumer confidence number would add to that.
EURUSD Technical Outlook
The EUR vs USD pair is pushing higher and found support after a dip yesterday. The pair should look to test the 1.1900 level but is lower in the European session. Going long on a close above 1.1900 would be the safest strategy. A failure at the resistance would see the pair move lower to test the 50-day moving average at 1.1775. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
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EURUSD Daily Chart
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