GOLDWELL：Daily Market Recap - EURUSD Weekly Outlook

The Euro ended the week on a strong footing against the US Dollar, as the pair closed above the 1.1906 resistance level on Friday opening the possibility of a test of the 1.20 yearly highs in the coming sessions.

Last week saw a flurry of mixed signals in the market as investor risk sentiment tipped back and forth between optimism and caution. The tug of war between the rising number of covid-19 cases in Europe and the US versus the eagerly awaited public availability of a vaccine continues to shape investment decisions and has kept traders under the veil of uncertainty.

One of the positive points from last week was that US President Trumps accepted to begin the formal transition process with the incoming President-elect Joe Biden. Although a straight acknowledgment of defeat by Trump is yet to be heard, markets welcomed the news of a smooth transfer of power.

Another positive sign came from the equities sphere with the Dow Jones Industrial Average breaking above the 30,000 marks for the time in history. Commodities also had a decent week with both Brent and Crude oil futures rising steadily, potentially a sign of rising expected economic activity for December.

The EURUSD is benefitting from the overall traction provided by a rise in risk sentiment and the corresponding fall in the value of the US Dollar. The main trend in the pair is pointing upwards though we are entering close to pullback territory as we deviate further from the mean. Particularly so as headwinds remain present in the Eurozone with countries still in lockdown and lackluster economic data expected to continue to weigh on the bloc in the coming week.

From a technical perspective, the EURUSD is setting itself up for a test of the 1.20 mark though with the RSI nearing oversold levels, a break above that point seems unlikely at least within the next session. The probable bullish scenario for the EURUSD will be a pullback from the 1.20-1.21 down towards the 1.196 level in order for the pair to build a solid base to drive higher in the longer run. Traders may look to short the pair around the 1.20 mark for a target of 1.195.

Support & Resistance Levels:

R3 1.24732

R2 1.22326

R1 1.20000

S1 1.19601

S2 1.19000

S3 1.18522

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.