The EURUSD is starting the month in a high note. The pair is up by 0.25% and is trading at 1.1747, which is just three pips below the important resistance at 1.1750.
EUR/USD fundamental analysis
The EUR/USD pair dropped by about 2% in September partly because of the stronger dollar and the rising risks in the market. Some of the best-known risks were about the US election where political temperatures continued to rise. Similarly, the new cold war between the United States and China helped push the dollar higher.
However, the EURUSD has been making a steady comeback in the past few days. Indeed, it has risen by close to 0.80% in the past five days.
Today, the pair is rising even after some stronger data from the United States. Yesterday, data released by ADP showed that the economy added more than 749k jobs in September. That was higher than the 650k that analysts were expecting. It was also higher than the previous month’s increase of more than 481k.
Tomorrow the pair will react to the official jobs data from the United States. Analysts expect the data will show that the economy added more than 850k jobs as the unemployment rate fell to 8.2%. Later today, the Bureau of Labour Statistics (BLS) will release the initial jobless claims for the week.
Meanwhile, we will receive the important manufacturing PMI data from Europe and the US today. Based on the flash manufacturing PMI released last week, analysts expect the data to show strong performance in September.
Analysts are generally optimistic that the EUR/USD will continue rising this month. In a report, those at UOB said that they see the euro probing the 1.1830 in the next three weeks. Similarly, in their third-quarter outlook, analysts at ATF wrote that:
“So, for now, the technical analysis favours the upside in EURUSD, but this may change as we near the end of 2020.”
EURUSD technical outlook
The four-hour chart shows that on Tuesday, the EURUSD rose and tested the important resistance level at 1.1750. As you can see, the pair had struggled to move below this level several times before. It then pulled back and fell to a low of 1.1685 yesterday. Now, the pair is just three pips below this resistance, which means that bulls are attempting to assert control.
Therefore, I suspect that the outlook, at least for today, is bullish. A move above this resistance will see the pair jump to the 1.1800 level. On the flip side, a move below yesterday’s low of 1.1685 will mean that there are still sellers in the market.