EUR/USD Mid-Session Technical Analysis for November 2, 2020

The Euro is inching lower on Monday after buyers came in to defend the Fibonacci support at 1.1616 and the main bottom at 1.1612. We could be looking at position-squaring ahead of Tuesday’s U.S. Presidential election, or a reaction to the news that Euro Zone factory activity boomed in October as Germany surged. Later today, investors will get the opportunity to react to manufacturing PMI data from the United States.

At 13:41 GMT, the EUR/USD is trading 1.1642, down 0.0005 or -0.04%.

In economic news, manufacturing growth in the Euro Zone boomed in October but the recovery from severely depressed activity at the height of the coronavirus pandemic was again mostly driven by a buoyant Germany, a survey showed.

Also likely of concern to policymakers, and highlighting a further divergence in the recovery, a flash reading of the overall survey showed activity in the bloc’s dominant service industry contracted last month as a second wave of the virus swept across Europe.

The IHS Markit’s final Manufacturing Purchasing Managers’ Index (PMI) climbed to 54.8 in October from September’s 53.7, its highest reading since July 2018 and ahead of the 54.4 flash estimate.

German factories saw record growth in new orders in October but it has recently imposed controls almost as strict as the lockdowns of the first phase of the crisis suggesting at least some of that manufacturing activity might be curtailed.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The EUR/USD is down eight sessions from its last main top, which puts it inside the window of time for a potentially bullish closing price reversal bottom.

A trade through 1.1612 will reaffirm the downtrend. The main trend changes to up on a move through the last main top at 1.1881.

The main range is 1.1371 to 1.2011. The EUR/USD is currently trading inside its retracement zone at 1.1691 to 1.1616. Trader reaction to this zone could determine the longer-term trend of the Euro.

The new minor range is 1.1881 to 1.1622. Its 50% level at 1.1751 is a potential upside target.

Daily Swing Chart Technical Forecast

Trader reaction to Friday’s close at 1.1647 should determine the direction of the EUR/USD on Monday.

Bullish Scenario

A sustained move over 1.1647 will indicate the presence of buyers. This could trigger a rally into the 50% level at 1.1691. This is a potential trigger point for an acceleration to the upside with 1.1751 the next potential upside target.

Bearish Scenario

A sustained move under 1.1647 will signal the presence of sellers. This could lead to a retest of the intraday low at 1.1622, followed by the main Fibonacci level at 1.1616 and the main bottom at 1.1612.

The main bottom at 1.1612 is a potential trigger point for an acceleration to the downside. The daily chart indicates there is no real support until 1.1371.

For a look at all of today’s economic events, check out our economic calendar.