EURUSD passes 1.1900 – 1.2000 in the yearly close, here we come
Source: Economic Events November 27, 2020 - Admiral Markets Forex Calendar
The "Thanksgiving" holiday and "Black Friday" (for updated trading hours, please check our website here) will likely result in a quiet and unspectacular close of the trading week. As such, the same situation will likely unfold in FX markets, respectively EURUSD.
The bullish outlook for the currency pair has intensified over the past days.
On Wednesday, EURUSD pushed back towards and above 1.1900, levelling the path up to the current yearly highs around 1.2000 and even higher in the last weeks of 2020.
The main drivers behind our bullish outlook are the following:
- The favourable technical environment
- The bullish seasonal window that opens in EURUSD in December, dating back to the mid-1980s
- Recent news of President-elect Joe Biden's selection of Janet Yellen as Treasury secretary
This move from Biden is also, mid- to long-term, a potential driver for the US-Dollar to move lower. The reason is that Yellen, the former FED chairwoman, is a known "dove" and markets should expect a massive monetary and fiscal stimulus package to revive the world's biggest economy.
As a result, US yields are already topping out slightly below 1% with the possibility of seeing further potential on the downside and, thus, seeing no real reason not to expect EURUSD to push above 1.2000 soon.
Technically, we consider the short-term picture to remain bullish as long as EURUSD trades above 1.1870/1900 while we consider a substantial drop back below 1.1800 to be "negative". Such a drop would neutralize the current bullish EURUSD picture.
In general, the mode in EURUSD remains bullish as long as we trade above 1.1600, even though a drop lower wouldn't necessarily switch the mode to "ultra"-bearish, since the currency pair still has solid support in the region around 1.1400/1500:
Source: Admiral Markets MT5 with MT5SE Add-on EURUSD Daily chart (from August 21, 2019, to November 26, 2020). Accessed: November 26, 2020, at 10:00 PM GMT. Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the EURUSD fell by 10.2%, in 2016, it fell by 3.2%, in 2017 it increased by 13.92%, in 2018, it fell by 4.4%, and in 2019, it fell by 2.2%, meaning that in five years, it was down by 7.3%.
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