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EURUSD: buyers run into resistance

The EURUSD pair traded higher on Wednesday, November 25, advancing 0.18% to 1.1912. Market participants brushed aside negativity surrounding the deadlocked Brexit negotiations, as well as the extension of Germany’s lockdown. German Chancellor Angela Merkel said that the country's authorities have decided to extend the lockdown imposed on November 2 until December 20. Merkel went on to say that if the pandemic cannot be reined in, the lockdown will be prolonged until February.

Todays macro agenda (GMT 3)

12:00 EU: M3 money supply and private sector lending (October)

15:30 EU: monetary policy meeting accounts

EURUSD: buyers run into resistance

Current outlook

Major currencies have been trading in positive territory during Asian trading. The euro rose to 1.1939 on the back of cross rates. Meanwhile, the aussie and the kiwi are under pressure. They are also holding in positive territory amid overall weakness in the US dollar.

Given that today is a holiday stateside and trading floors are offline, we expect to see thin volumes during the American session. Market participants remain focused on the US election outcome, Brexit talks and equity market trends. Yesterday’s FOMC minutes imply no policy changes in December.

GPBUSD is also trading under the impact of multidirectional factors. On the one hand, there is optimism about the Covid-19 vaccine. On the other hand, the Brexit news flow looks discouraging. It still remains unknown whether the UK will manage to hammer out a trade deal or not.

If EURUSD gains stall below the range of 1.1940-1.1950, a correction to 1.1895 can be expected amid subdued trading. If the euro starts to sell in crosses, the pullback could gather mometum to 1.1865. Conversely, a breakout above 1.1950 would most likely push the pair up to 1.1980.


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