GOLDWELL：Daily Market Recap - EURUSD Weekly Forecast

The EURUSD ended the week on a softer note amid a worsening business climate in the Eurozone with coronavirus containment measures continuing to weigh on the economic bloc. Uncertainty around the timing and delivery of the EUs budget furthered the pessimism in the Euro and will likely hold back the currency in the week to come.

Lockdowns in France and Germany are set to be extended into December with covid-19 infection numbers yet to return below acceptable levels. Containment measures are also expected to be announced in the UK and US, with London set to impose new rules on Monday to curb the spread of the virus.

US hospitalization rates have reached record highs as schools in New York are expected to close while a state-wide curfew has been declared in California. Despite encouraging news over a covid-19 vaccine by Pfizer and Moderna, the fact is we are still not out of the woods yet and experts warn that the global economy will continue to be under pressure well into the next year.

Meanwhile, EU nations have been in talks for the past weeks over a new relief package though negotiations have been put in limbo after Poland and Hungary vetoed the current bill. Both nations are against a proposed clause that would deny funds to EU nations that do not uphold a certain democratic standard. A delay in approving the recovery fund will maintain pressure on the Euro until differences are resolved.

From a technical perspective, the main trend in the EURUSD is up on the daily chart though it appears bulls are losing their edge over sellers in the short run. The pair seems vulnerable as it attempts to desperately hang onto the 1.85 handles, with a break below it likely to motivate sellers to test the 1.180 psychological support level.

Value hunters should return into the fray between the 20-day moving average and the 1.180 marks. Until then, traders may look to conservatively short the pair based on weak fundamentals and set a target for the 1.182 level.

(Chart Source: Tradingview 22.11.2020)

Looking ahead, the Euro remains highly sensitive to movements in the US Dollar, and should Congress approve a new relief package next week, we may see a reversal in the EURUSD sending the pair up towards the 1.19 level. That said, we are still in the early stages of the negotiations with both Republicans and Democrats at loggerheads over the size of the relief fund, which should provide time for more downside in the EURUSD.

Support & Resistance Levels:

R3 1.2000

R2 1.1960

R1 1.1900

S1 1.1852

S2 1.1800

S3 1.1767

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.