Euro rallied to the highest levels since mid-September
EURUSD extends the rally on Friday as the dollar is falling across the board despite risk aversion dominates global financial markets. The euro climbed to mid-September highs around 1.1885 and could threaten the 1.19 handle in the short term if the greenback stays under pressure. A downbeat tone around the US dollar persists amid rising odds of a Biden win in the election.
The common currency ignored the economic data earlier in the day. The official report showed that industrial production in Germany rebounded but less-than-expected in September. The industrial output came in at 1.6% MoM versus a 2.7% jump expected and -0.2% last.
In a wider picture, the pair could regain the 1.20 handle last seen in early-September if the greenback keeps bleeding. On the positive side, the pair is trading above the key moving averages while the daily RSI is pointing strongly higher and stays in the neutral territory. Despite the surge in momentum appears to be overdone, there are no signs of weakness just yet, suggesting the euro could continue to advance, at least in the short term.
On the other hand, a solid resistance comes around 1.1880, and the pair may need the additional catalyst to overcome this hurdle and challenge the 1.19 barrier. A break of 1.1760 would indicate the current upward pressure has eased while on the upside, the next resistance is expected at 1.19, followed by 1.1915.
Fundamentally, the upside momentum in the EURUSD pair could be capped by rising coronavirus cases and spreading lockdowns in Europe. In the short-term, the pair could be affected by the US NFP jobs report that will likely point to a further slowdown in the country’s job market recovery. Weak numbers may spook investors and thus help the safe-haven greenback to trim losses on an intraday basis.