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FX.co ★ 19.11.2020: Traders prefer to sell off European currencies. Outlook for EUR/USD and GBP/USD.

19.11.2020: Traders prefer to sell off European currencies. Outlook for EUR/USD and GBP/USD.

Yesterday, even data on the UK’s and eurozone inflation failed to affect investors’ sentiment. Market participants still prefer the wait-and-see approach amid uncertainties caused by the US presidential election. Moreover, the rising number of the coronavirus cases in Europe and the US is weighing on the market. Investors simply cannot decide what to do.

Thus, it is quite possible that today’s report on the US unemployment claims may revive the market. Moreover, the forecast is really positive. Thus, the number of the first-time claims may drop to 685 thousand from 709 thousand.

At the same time, the number of continuous claims is expected to decline to 6 million 250 thousand from 6 million 786 thousand. It means that the US labor market is confidently recovering thus having a positive influence on the whole economy. However, the recent presidential election and worsening epidemiological situation are still the key issues.

Germany has reported 22.6 thousand new cases. This is the largest number recorded since the pandemic began in March. At the same time, France reported 28.4 thousand new confirmed cases. At the moment, it is the fourth most hit country in the world. In Spain and Italy, the number of infected people is also rapidly increasing.

The euro/dollar pair reached the resistance level near the local high of 1.1893 logged on November 17. After that, it stopped and started dropping towards 1.1820. If the price fixes below 1.1810, it may slide to 1.1775-1.1745. According to the alternative scenario, the pair may start fluctuating between the levels of 1.1850/1.1890.

Traders are also concerned about the trade agreement between London and Brussels. Some economists suppose that in case of non-agreement, Brussels may launch a series of emergency measures. Amid such news, the pound/dollar pair hit the resistance level of 1.3300. After that, it stopped and decreased to 1.3205. If the price fixes below 1.3200, it may drop even deeper. Otherwise, it is likely to hover between 1.3200/1.3250.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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