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#1 30-11-2020 13:33:07

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: a major week up ahead for forex traders

EUR/USD: a major week up ahead for forex traders


The last trading month of the year has arrived, and people already have the December holidays in mind. This December trading month is usually a special one. This year it is even more so because of the impact of the virus situation on travel and social gatherings.

The Christmas and New Year holidays fall on weekdays, which means that this year there will be more free days than usual. Trading in the second half of the month will therefore be limited, as most people take time off.

However, the coming month remains interesting for several reasons. One is the NFPs scheduled for the end of this week, another is the ECB the following week, and the last one is the Fed a week after the ECB.

Friday's NFPs - the key event of the week

The dollar continues to suffer everywhere. Downward pressure on USD bulls continues as EUR/USD, AUD/USD and GBP/USD rose during the Thanksgiving week. In the case of the EUR/USD, the pair closed the week just below 1.20 with the ECB line in the sand.

Such a strong EUR presents a difficult challenge for the ECB, but there is little the central bank can do if the market continues to sell the USD. What we could see towards the end of the year is some profit taking. As the EUR/USD trend has continued unabated since March, some investors may see some profit taking before the end of the year and the ECB next week.

The Reserve Bank of Australia is announcing its interest rate this week as well. It is expected to leave its terms unchanged as all eyes are on the ECB and the Fed this month.

This Friday being the first of the trading month means the NFP numbers will be released. There is always something special in the NFP week, and this week will be no different.

Expect erratic price action today towards the main time of the London fixing as month-end flows will be responsible for increased volatility. After that, the focus will be on Friday's numbers. Judging by the first unemployment statements, it is likely that the NFP will not meet expectations. If this is the case, the USD could take another blow, putting even more pressure on the ECB.

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