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EUR / USD pair declines prior to the Non-Farm Payrolls publication

The EUR / USD pair continues its moderate decline on Friday amid the recovery of the dollar index.

 

After the end of the second round of voting in Georgia and the approval of Joe Biden by Congress as the new president of the United States, the dollar rate stabilized. Now the American currency is trying to recover the losses of the previous trading days.

 

The main attention of investors today will be directed to data on the labor market. On the background of tougher quarantine restrictions, experts expect some key indicators to deteriorate. In particular, the unemployment rate is expected to rise from 6.7% to 6.8%. The growth in the number of employment in the non-agricultural sector may slow down from 245 thousand to 71 thousand. The market reaction to the report will depend on the size of the deviation of the actual values ​​from the forecast indicators.

 

In Europe, the focus remains on news of the spread of the coronavirus pandemic. The situation continues to deteriorate. The risks to the EU economy are growing, increasing the pressure on the euro.

 

Germany reported a record number of deaths from COVID-19 registered per day - 1,188. For the third day in a row, more than 1,000 people die from COVID-19 in Germany. The number of cases is also growing. During the day, 31,849 new cases were registered. This is the second largest indicator of all time.

 

A difficult situation is also observed in other EU countries.

 

Germany released industrial production data for November today. Growth slowed down significantly, from + 3.4% to + 0.9% (+ 0.7% forecast). The EUR / USD pair continues to decline.

 

The bearish signals prevail locally on the chart. Sellers are increasing pressure to the level 1.2240. We are waiting for the breakout and the development of the downward movement in the direction of the level 1.2160.

 

  • Resistance levels: 1.2275, 1.2335, 1.2385.

 

  • Support levels: 1.2240, 1.2160, 1.2100.

 

The main scenario is a breakdown of the support at 1.2240 and a decline in the direction of 1.2160.

 

Alternative scenario - growth to 1.2335.

 

The current fundamental outlook is neutral. We consider shorts from the level of 1.2275

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