- EUR / USD loses traction and falls back to the 1.1820 zone.
- Christine Lagarde, President of the ECB, says the recovery loses steam in the fourth quarter.
- The videoconference of the European Council will focus the attention of investors on Thursday.
The common currency continues to lose momentum and drag the pair EUR / USD to new three-day lows in the 1.1820 region during the European session on Thursday.
EUR / USD weaker after ECB, focuses attention on EU Conference
EUR / USD is extending Wednesday’s losses towards the 1.1820 zone after Christine Lagarde’s comments, President of the ECB. In fact, Lagarde has said that The region’s recovery has lost momentum in the fourth quarter, particularly in the services sector, in response to the strong rebound in coronavirus cases.
Furthermore, Lagarde has once again reiterated the need for monetary and fiscal policies to work together, while suggesting that inflation will remain subdued until early 2021.
Later in the day, all attention will turn to the European Council videoconference, where the EU Recovery Fund is expected to be one of the meeting’s priorities, mainly following the possible veto of Hungary and Poland.
Regarding the data for the region, the current account figures for September will be released along with the production data for the construction sector. Turning to US data, initial weekly jobless claims will be the focus of investors’ attention, followed by the Fed and Philadelphia Manufacturing Index, Existing Home Sales Data, the Leading Indicator for the CB and the speech of the governor of the Cleveland Fed, Loretta Mester.
What can we expect around the EUR?
EUR / USD has once again been unable to retest, let alone exceed, the 1.1900 level despite the favorable context in recent days. However, in the very short term, the EUR / USD is expected to remain under pressure due to the impact of the pandemic on the region’s economy and developments around the Recovery Fund. In addition, the dovish stance of the ECB and possible announcements of additional stimulus in December also help to limit the pair’s rise.
EUR / USD levels
At the time of writing, the EUR / USD pair is shedding 0.23% on the day, trading at 1.1824. The next support is at 1.1745 (November 11 low), followed by 1.1709 (Fibonacci level of the 2017-2018 movement) and finally 1.1602 (November 4 low). On the upside, a breakout above 1.1920 (Nov 9 high) would target 1.1965 (Aug 18 high) en route to 1.2011 (Sept 1 high).
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