EUR / USD remains under pressure near 1.1720 ahead of the ECB

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  • EUR / USD remains under pressure near the 1.1720 support.
  • The German unemployment rate fell to 6.2% in October.
  • US Q3 advanced GDP and initial jobless claims will be released at the start of the US session, following the ECB rate decision.

The common currency remains under pressure for another day and forces the EUR / USD pair to move to the lower end of the weekly range near the 1.1720 level.

EUR / USD on the defensive before the ECB

The EUR / USD loses ground for the fourth day in a row on Thursday and remains around Wednesday’s weekly lows near the 1.1720 level.

In the meantime, Investor preference continues to shift towards safe haven assets such as the USD, in response to the incessant advance of the pandemic and its impact on the global economy.

Furthermore, the EUR / USD pair remains under pressure before the ECB’s monetary policy meeting to be held later on Thursday. The common currency remains at the center of the debate amid rising expectations for a pessimistic tilt on the central bank event, where the possibility of the Governing Council announcing new stimuli cannot be ruled out.

With regard to data from the euro zone, the Spanish advanced CPI has risen 0.5% month-on-month in October and has contracted -0.9% in the last twelve months. In Germany, the unemployment rate fell to 6.2% in October and the change in unemployment fell by 35,000. At the beginning of the session, data showed that Italian business confidence improved to 95.6 points this month, while consumer confidence fell slightly to 102.0.

On the other side of the Atlantic, initial weekly jobless claims, advanced third-quarter GDP figures, and pending home sales data for September will be released today.

What can we expect around the EUR?

EUR / USD loses momentum and retests the 1.1700 region against the backdrop of persistent demand for safe haven from the USD. However, the outlook for EUR / USD remains positive and bearish movements are considered only corrective. Furthermore, the positive bias in the euro continues to be supported by the favorable results of national fundamentals (despite the fact that momentum appears somewhat mitigated in several regions), the cautious attitude of the ECB so far, and the strong position of the current account of the eurozone. Also, a likely “blue wave” after the US elections is considered a negative driver for the USD and has the potential to provide additional support to the EUR / USD pair in the long term.

EUR / USD levels

At the time of writing, the EUR / USD pair is shedding 0.24% on the day, trading at 1.1718. The next support is at 1.1688 (Oct 15 low), followed by 1.1612 (Sept 25 low) and 1.1495 (Mar 9 high). On the other hand, a breakout of 1.1880 (October 21 high), would point to 1.1917 (September 10 high) on the way to 1.1965 (August 18 high).

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Credits: Forex Street

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