- EUR/USD started a strong rally above the 1.1750 and 1.1800 resistance levels.
- GBP/USD surged above 1.3050, gold price climbed higher sharply towards $1,960.
- The US nonfarm payrolls increased 638K in Oct 2020, more than the market forecast of 600K.
- The Euro Area Sentix Investor Confidence could improve from -14 to -8.3 in Nov 2020.
EUR/USD Technical Analysis
The Euro formed a support base near 1.1600 before starting a fresh increase against the US Dollar. EUR/USD surged above 1.1800 and traded to a new two-month high.
Looking at the 4-hours chart, the pair gained pace after it broke the 1.1750 resistance and a connecting bearish trend line. There was a proper close above the 1.1800 zone, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
The pair even climbed above the 76.4% Fib retracement level of the downward move from the 1.1880 high to 1.1602 low. The current price action suggests that the pair is likely to continue higher above the 1.1900 resistance.
The next resistance could be near 1.1945 or the 1.236 Fib extension level of the downward move from the 1.1880 high to 1.1602 low.
If there is a downside correction, the pair could find support near the 1.1840 level. The main support is now forming near the 1.1750 level and the 100 simple moving average (red, 4-hours).
Fundamentally, the US nonfarm payrolls report for Oct 2020 was released this past Friday by the US Bureau of Labor Statistics. The market was looking for a rise of 600K in jobs.
The actual result was above the market forecast, as the US nonfarm payrolls increased 638K in Oct 2020. More importantly, the US Unemployment rate declined from 7.9% to 6.9%.
The report stated:
In October, the unemployment rate declined by 1.0 percentage point to 6.9 percent, and the number of unemployed persons fell by 1.5 million to 11.1 million. Both measures have declined for 6 consecutive months but are nearly twice their February levels (3.5 percent and 5.8 million, respectively).
Overall, the US Dollar declined sharply after 2020 US election results. GBP/USD also started a strong rally above 1.3000 and 1.3050. Besides, gold price surged above $1,920 and $1,950 resistance levels.
Upcoming Economic Releases
- Germany’s Trade Balance Sep 2020 – Forecast €18.2B, versus €15.7B previous.
- Euro Area Sentix Investor Confidence Nov 2020 – Forecast -14.0, versus -8.3 previous.