EURUSD closes the week on a strong note

The US Dollar was mixed against its major pairs on Friday. On the US economic data front, Change in Nonfarm Payrolls dropped to 245K on month in November (460K expected), from a revised 610K in October. The Unemployment Rate declined to 6.7% on month in November (as expected), from 6.9% in October. The Trade Deficit expanded to 63.1 billion dollars on month in October (64.8 billion dollars expected), from a revised 62.1 billion dollars in September. Factory Orders increase 1.0% on month in October (+0.8% expected), compared to a revised +1.3% in September. Finally, Durable Goods Orders rose 1.3% on month in the October final reading (as expected), in line with the October preliminary reading.                

On Monday, no major economic data is expected.       

The Euro was also mixed against most of its major pairs but strongly bearish against the CAD. In Europe, Research firm Markit has published November U.K. Construction PMI at 54.7 (vs 52.0 expected). Separately, the German Federal Statistical Office has posted October factory orders at +2.9% (vs +1.5% on month expected).

The Australian dollar was weaker against most of its major pairs with the exception of the JPY and NZD.


Regarding the week's U.S. economic data front:

Factory Orders increased 1.0% on month in October (+0.8% expected), compared to a revised +1.3% in September. Durable Goods Orders rose 1.3% on month in the October final reading (as expected), in line with the October preliminary reading. 

On the jobs front, Change in Nonfarm Payrolls dropped to 245K on month in November (460K expected), from a revised 610K in October. The Unemployment Rate declined to 6.7% on month in November (as expected), from 6.9% in October. Initial Jobless Claims declined to 712K for the week ending November 28th (775K expected), from a revised 787K in the week before. Continuing Claims dropped to 5,520K for the week ending November 21st (5,800K expected), from a revised 6,089K in the prior week. Automatic Data Processing's Employment Change showed that 307K jobs were added on month in November (440K expected), compared to a revised 404K jobs added in October. 

Markit's US Manufacturing Purchasing Managers' Index remained at 56.7 on month in the November final reading (as expected), in line with the November preliminary reading. Construction Spending rose 1.3% on month in October (+0.8% expected), compared to a revised -0.5% in September. Market News International's Chicago Business Barometer dropped to 58.2 on month in November (59.0 expected), from 61.1 in October. 

The Trade Deficit expanded to 63.1 billion dollars on month in October (64.8 billion dollars expected), from a revised 62.1 billion dollars in September. 

Regarding housing, The Mortgage Bankers Association's Mortgage Applications slipped 0.6% for the week ending November 27th, compared to +3.9% in the previous week. Pending Homes Sales declined 1.1% on month in October (+1.0% expected), compared to a revised -2.0% in September.

Lastly, The Federal Reserve's Beige Book stated that most Districts described economic expansion as moderate since the last reporting period. Nearly all Districts reported that employment rose, but for most, at a slow pace and that a full recovery is still incomplete. In most Districts, companies disclosed that input prices rose modestly, along with selling prices of final goods. However, the rise in Covid-19 cases has brought about more school and plant closures as well as renewed fears of infection.

The most active currency pair of the week was the EURUSD which climbed 1.56% (187 pips). From a technical perspective, the pair is gaining upside momentum after breaking above a consolidation zone that was in place since July. As long as 1.20 remains support, look for a continuation of the uptrend towards our next target resistance level of 1.2265 and 1.2415 in extension. A break below 1.20 could pressure the pair back into a consolidation. 



Source: GAIN Capital, TradingView