EUR/USD Mid-Session Technical Analysis for November 6, 2020

The Euro is trading higher against the U.S. Dollar on Friday as vote counting for the contentious U.S. elections slowly moved toward a divided government and investors predicted more losses for the greenback.

The single currency has risen sharply this week on the dollar’s weakness, but has also benefited from news of the European Union inching closer to a budget deal.

At 16:27 GMT, the EUR/USD is at 1.1884, up 0.0054 or +0.46%.

Investors are betting that Democrat Joe Biden will become the next president but Republicans will retain control of the Senate, which will make it difficult for the Democrats to pass the larger coronavirus relief package they have been pushing.

U.S. Jobs Report Shows Need for More Stimulus

The need for more stimulus was underlined on Friday when the U.S. government reported that employers hired the fewest workers in five months in October. It was the clearest evidence yet that the end of previous fiscal stimulus and exploding new coronavirus infections were sapping momentum from the economic recovery.

Essentially, the U.S. economy is decelerating, and that’s playing out in a markedly weaker dollar.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Friday when buyers took out the swing top at 1.1881. The main trend will change to down on a trade through 1.1603.

The main range is 1.1371 to 1.2011. Its retracement zone at 1.1691 to 1.1616 is support. This zone was tested earlier in the week.

The minor range is 1.2011 to 1.1603. The EUR/USD is currently trading on the strong side of its retracement zone at 1.1855 to 1.1807, putting it in a bullish position. This zone is potential support.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close is likely to be determined by trader reaction to the short-term Fibonacci level at 1.1855.

Bullish Scenario

A sustained move over 1.1855 will indicate the presence of buyers. Taking out the intraday high at 1.1891 will indicate the buying is getting stronger. This could trigger a rally into the next main top at 1.1917. This is a potential trigger point for an acceleration into the September 1 main top at 1.2011.

Bearish Scenario

A sustained move under 1.1855 will signal the presence of sellers. This could trigger a break into the 50% level at 1.1807. This is a potential trigger point for an acceleration to the downside with the main 50% level at 1.1691 the next major downside target.

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