The EUR / USD pair is trading in different directions on Friday, holding near the highs set yesterday.
The main driver of the growth of the currency pair is still the news from the USA. Investors are confident in the victory of the representative of the Democratic Party, Joe Biden, despite the fact that votes have not yet been counted in all states. Currently, Biden is gaining 264 electoral votes, with 270 needed to win. Trump has secured the support of 214 electors. Trump's headquarters are already trying to challenge the election results and are filing lawsuits for recounts in a number of states.
Investors hope that if Biden wins in the US, a more ambitious economic stimulus plan will be adopted, as well as the situation with international trade will improve by improving relations with China and refusing to aggravate trade relations with the EU. Against this background, investor interest in the dollar is falling.
Additional pressure on the American currency may be exerted by the results of the FOMC meeting held the day before. Following the meeting, the Fed, as expected, kept the main parameters of monetary policy unchanged, but Jerome Powell hinted at a possible expansion of the asset buyback program in the future.
In the EU, sad reports about the spread of COVID-19 remain in the spotlight. Germany for the next day in a row updates the anti-record for morbidity. On Thursday, 21,506 new infections were recorded. Earlier, the government introduced a monthly quarantine in the country. Strict quarantine measures remain in other EU countries. Experts revise for the worse the forecasts for the development of the EU economy in the 4th quarter.
Today in the economic calendar the main event of the day will be the report on the US labor market. Traditionally, the focus will be on employment indicators and average wages. Experts predict a slight decrease in indicators compared to the previous month.
On the chart, the currency pair overcame the resistance at 1.1785 without much difficulty. Now this level acts as a support. The next upside target is the level 1.1865.
The main scenario - growth to 1.1905 and a downward reversal.
Alternative scenario - decline to 1.1700 from current levels.
The current fundamental outlook is moderately positive. We consider longs from the level of 1.1785.
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