EUR/USD Forecast: Economic growth hints to kick start the week

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EUR/USD Current Price: 1.1858

  • The world reported 11,752 new coronavirus deaths on Friday, the deadliest day on record.
  • Markit will publish the November preliminary PMIs for the EU and the US.
  • EUR/USD is neutral-to-bullish trading above 1.1800 but lacks directional momentum.

The EUR/USD pair finished a fourth consecutive day little changed around the 1.1850 level, ending the week with modest gains but within familiar levels. Financial markets became apathetic last week, trapped between resurgent coronavirus cases and vaccine hopes. Several front-runner companies developing vaccines to prevent COVID-19 have reported early results from their stage three test, providing encouraging results. Yet, at the same time, the world reported 11,752 new coronavirus deaths on Friday, making it the deadliest day since the pandemic began. Such numbers result in different restrictive measures that could be translated into a slower economic recovery yet to be seen and a steeper downturn before the comeback.

Macroeconomic data reflect the situation. This Monday, Markit will publish fresh hints on economic health, the November preliminary estimates of its PMIs for the EU and the US. Manufacturing activity and services output are seen contracting from October levels in Europe, while US ones are seen holding stable in expansion territory.

EUR/USD short-term technical outlook

The EUR/USD pair has held to above the 1.1800 level alongside the week, which keeps the risk skewed to the upside, despite the lack of momentum. In the daily chart, the pair remains above all of its moving averages, with a bullish 100 DMA approaching a flat 20 DMA, reflecting the longer-term prevalence of bulls. Technical indicators hold on to positive ground, lacking directional strength. The 4-hour chart offers a neutral stance, as the pair hovers around a flat 20 SMA, while technical indicators hover around their midlines.

Support levels: 1.1810 1.1770 1.1720

Resistance levels: 1.1885 1.1920 1.1965

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