19.11.2021: USD to close this week in green. Outlook for EUR/USD and GBP/USD
It is obvious that the US dollar will close this trading week with a rise. The greenback is gaining in value amid the growing expectations that the Fed will raise the key interest rate earlier than planned. What dynamic is showing the euro today? Let’s find it out in our new video review.
Although the UK retail sales figures turned out to be better than expected, the pound sterling is losing value. Retail sales declined by 1.3% instead of falling by 1.6%. Nevertheless, the indicator is still sliding amid the ongoing economic recovery. In addition, the previous report was upwardly revised from a drop of 1.3% to a decrease of 0.6%. That is why the current decline seems deeper than anticipated, thus causing the depreciation of the British currency.
The euro also followed its counterpart. Thus, the pound sterling’s drop has affected other currencies via the US dollar index. However, the euro showed a bigger decline than the British pound. Such a situation was triggered by the worsening epidemiological situation.
Thus, Austria imposed tight containment measures on Monday. Germany is also considering the introduction of tough measures to curb the virus spread. The eurozone's largest economy has recorded a surge in the number of new virus cases. According to the mass media, the situation may even spiral out of control. That is why the euro is falling amid the possibility of new restrictive measures that will inevitably affect the eurozone economy. Since there will be no other macroeconomic publications today, only announcements and decisions of the eurozone authorities may stop the decline.
Let us take a look at the trading charts.
The euro’s oversold status has positively affected the volume of long positions. As a result, the euro/dollar pair jumped to the level of 1.1400. Despite the local change in the trend, the market sentiment remains bearish.
If the pair resumes sliding, it may return to 1.1300. If the price fixes below this level, it is likely to hit a new local low.
Meanwhile, the pound/dollar pair slackened its correctional movement near the level of 1.3512. Then the pair entered the sideways channel between 1.3465 and 1.3510. At the beginning of the European session, the volume of short positions surged, thus leading to a breakout of the lower limit at 1.3465. High speculative activity may cause a correctional process towards 1.3400.