The EURUSD pair closed higher on Thursday, November 12. The single currency rose 0.22% against the US dollar to 1.1802. During yesterday’ session, buyers drew support from a weakening British pound and a rally in the EURGBP cross after Brexit news hit the wires.
Trade talks between the EU and the UK remain deadlocked and are unlikely to wrap up this week. They will continue into next week as negotiators will not have enough time to strike a Brexit accord given ongoing differences. A spokesman for British PM Boris Johnson said the UK team still remains committed to bridging the gaps that separate the two sides.
Today’s macro agenda (GMT+3)
13:00 Eurozone: GDP growth rate, employment change (Q3) and balance of trade (September)
18:00 US: Michigan consumer sentiment (November)
19:00 UK: BoE Bailey speech
21:00 US: Baker Hughes weekly oil rig count
EURUSD recovered to the 67-degree line (1.1827), which has been a strong resistance level during recent corrections. Despite the rally in the EURGBP cross, buyers were unable to notch up solid gains. Cross technical analysis indicates that the market is ripe for a downward correction. In our view, if the euro slips below 0.898 against the pound, EURUSD will come under pressure.
The price action has been trending sideways for 19 hours. Market activity is expected to pick up after 8:00 GMT when trading opens in London. If our cross analysis is correct, the single currency will sink ahead of the weekend due to the rapid spread of the coronavirus. The first target level will be 1.1885 (the trendline from 1.1746), and the second will be 1.1740 (the 67-degree line).
An update on the US elections should be mentioned. The incumbent US President Donald Trump, citing an expert report on his Twitter account, wrote that the Dominion system deleted 2.7 mln votes cast for Trump across the country. Analysis of the data showed that in Pennsylvania, 221,000 Trump votes were switched to Biden, and 941,000 Trump votes were deleted. States using Dominion switched 435,000 Trump votes to Biden. The Electors must certify their results by December 14.
As regards today’s macro releases, FX players are advised to watch for Eurozone Q3 GDP as well as a speech by BoE Governor Andrew Bailey.