GOLDWELL：Daily Market Recap - EURUSD Weekly Forecast

The Euro traded slightly lower against the US Dollar on Friday after lackluster Non-Farm Payroll (NFP) figures halted the Dollars decline somewhat. The greenback has fallen by roughly 2 percent against a basket of currencies in the past 3 weeks and signs point to further downside in the near term.

The NFP figures released on Friday fell far below expectations with the number revised from the original 610k down to a meager 245k. The recent resurgence in the covid-19 virus in the US has been felt heavily in the job market with businesses ability to hire new workers further hampered by the lack of government relief funds.

US monetary stimulus discussions are ongoing in Congress with both Democrats and Republicans eager to come to a deal as soon as possible. However, the bipartisan deal for roughly 900 billion in relief funding brandied about last week has gotten some pushback from Senate majority leader Mitch McConnell. The Republican is pushing for a far lower amount of around 500 billion instead.

Meanwhile, the European Central Bank (ECB) will be issuing its monetary policy this coming Thursday. ECB Chief Christine Lagarde will likely announce that the central bank will not pursue an expansion of the easing program, opting instead to extend the current deal as the economic outlook in the Eurozone has improved materially since the last meeting.

From a technical perspective, the main trend in the EURUSD is up and a golden cross is forming on the weekly chart. The next hurdle to cross will be the April 2018 swing low level around the 1.22 handle. Should the pair manage to push above it, the next level to watch for will be the 1.23254 marks at the 0.236 Fibonacci retracement level from 2018 highs.

On the flip side, a break below the pivotal 1.20677 support channel could entice sellers to come back into the fold and push the EURUSD back towards the 1.20-1.19 bracket in the medium term. At which point we could expect value pickers to step back in and counter the downtrend. For now, traders may look to take advantage of any spillover selling in the pair and short the EURUSD for a target of 1.2080 and re-enter long positions at the 1.206 handle.

(Chart Source: Tradingview 06.12.2020)

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.