EURUSD: What Next for EUR to USD as Covid Outbreak Gets Out of Control?

The EUR to USD (EURUSD) pair is down by 0.15% today as traders wait for the flash manufacturing and services PMI numbers from Europe and the United States. The market is also reacting to the final presidential debate between Donald Trump and Joe Biden and the surging number of Covid-19 cases in Europe.

Markit and its partnering organisations will release the flash manufacturing, composite, and flash PMI numbers from Europe and the United States. In Germany, analysts polled by Reuters expect that the manufacturing PMI will drop from 56.4 in September to 55.1 in October. They expect that the services PMI will drop from 50.6 to 49.2.

In the Eurozone, analysts expect the data to show that manufacturing and services PMIs dropped to 53.1 and 47.0, respectively.

Still, regardless of the October PMIs, analysts are concerned about the rising number of Covid-19 cases in Europe. Yesterday, Germany confirmed more than 11k cases as the country accelerated testing. That was the highest figure ever recorded. It brings the total number of cases in Germany to more than 404k.

The same trend is continuing in Spain, where authorities fear that the cases have gotten out of control. The country recorded more than 20k cases yesterday. Other countries like Italy and Portugal have also recorded a surge, leading many analysts to fear about a double recession.

The EURUSD is also falling as traders react to the debate between Donald Trump and Joe Biden. In the relatively calm debate, the two talked about the economy, race, and the virus. Recent polls have shown that Biden has a slight edge against Trump. In a report, analysts at UOB wrote that:

“The current price action is still viewed as part of a consolidation phase. That said, the weakened underlying tone suggests EUR could drift lower within a lower trading range of 1.1790/1.1850.”

EUR to USD technical analysis

On the four-hour chart, we see that the EUR to USD price reached a high of 1.1880 yesterday. This price was slightly above the 61.8% Fibonacci retracement level. Today, the pair has moved below the middle line of the Donchian channels and below the 50% Fibonacci retracement level.

Therefore, it seems like bears are in control today, which will see the price continue falling as they aim for 1.1790. In this case, the upper range of the pair could be at the psychological level of 1.1850.

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EURUSD technical chart

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