EURUSD hits new all-time highs near 0.9950 as dollar decline continues

• The dollar continues to fall on Friday despite the NFP.
• After a busy week, the focus now turns to the US elections and the CPI.
• EURUSD continues to decline on the week, but the reversal is positive for the euro.

EURUSD continued to rise on Friday and reached a fresh two-day high at 0.9940, before pulling back to the 0.9900 area. The dollar has fallen sharply despite better than expected NFPs.

Employment figures showed the United States added 261,000 new jobs in October, above the 200,000 market consensus. After an initial positive reaction, the dollar slumped and is currently having its worst day in weeks. Improved market sentiment is helping to weaken the dollar amid job numbers and expectations that China will ease some of its “zero” policies.

Next week the focus will be on the US CPI figures due out on Thursday which should have a big impact on Fed policy expectations. The mid-term elections are on Tuesday .

Can you continue the bounce?

“The EURUSD has spent the week below parity and posted a lower low and a lower high, a sign that the bears are back. Profit taking before the weekend helped the pair bounce on Friday, but the prevailing downtrend remains firmly in place,” explains Valeria Bednarik, Chief Analyst at FXStreet.

Bednarik warns that the daily chart shows that the bearish continuation is in doubt. “EURUSD has rallied above a directionless 20 SMA, which provides immediate support around 0.9830, and looks poised to extend its rally towards the next relevant dynamic resistance level, a bearish 100 SMA currently around 1.0050″.

The pair is about to end the week with modest losses and far from the weekly low, a positive sign for euro bulls. Even so, it is still far from obtaining a weekly close of the 20-week SMA at 1.0040.

Technical levels