EUR / USD falls to two-week lows below 1.1700

• Dollar clings to earnings supported by risk aversion.
• The technical outlook for EUR / USD turns more bearish.

He EUR / USD returned to bearish path on Thursday after pause on Wednesday. It is trading around 1.1700, after falling to 1.1688, the lowest level since September 30.

The fall of the pair occurs before a rise of the dollar on all fronts. The greenback gained momentum before a fall in the stock markets around the world. In the last hour there was some relief, with the main Wall Street indices cutting losses, which helped the EUR / USD to return to the 1.1700 zone.

The Dow Jones is losing 0.80% and the Nasdaq 1.20%. The lack of an agreement between the White House and the Democrats for a new round of fiscal stimulus contributed to the decline in stocks. The economic data released from the US was mixed and did not help reduce risk aversion.

Initial jobless claims rose to highs in weeks, showing fragility in the labor market remains. On the bright side, the Philly Fed manufacturing survey posted an unexpected jump to a month high. The data had no influence on the market.

In Europe the focus of attention is on the coronavirus and Brexi. The leaders’ summit in Brussels, with an eye on whether an agreement can be reached to avoid a hard Brexit. In turn, in France, the United Kingdom and Germany, measures to restrict movement are being reintroduced due to the increase in cases of COVID-19. This is a factor that is also behind the fall in stocks.

Technical levels

EUR / USD has returned below the 20-day moving average which is past 1.1740. On the downside the next strong support emerges at 1.1680, followed by 1.1650 and then the September lows at 1.1610 appear.

In the opposite direction, the short-term bearish bias would be negated with an advance over 1.1800. Before this level, resistance is located at 1.1735 (20-hour moving average) and 1.1770.