Forex - EUR/USD weekly outlook: November 4 - 9

Forexpros - The euro fell to a one-month low against the broadly stronger U.S. dollar on Friday, as demand for the greenback was boosted by better-than-expected U.S. jobs data, while uncertainty over the U.S. presidential elections also weighed on market sentiment.

EUR/USD hit 1.2949 on Friday, the session high; the pair subsequently consolidated at 1.2832, 0.84% lower for the week.

The pair is likely to find support at 1.2753, the low of September 11 and resistance at 1.2949, Friday’s high.

The U.S. Department of Labor said the economy added 171,000 jobs in October, beating forecasts for an increase of 125,000. The unemployment rate ticked up to 7.9% from 7.8% in September as more people re-entered the labor force. 

The stronger-than-expected data saw investor’s trim back expectations for another round of quantitative easing by the Federal Reserve, bolstering demand for the greenback.

The dollar also found support amid uncertainty over the outcome of Tuesday’s U.S. presidential elections, with opinion polls indicating a dead heat between President Barack Obama and Republican challenger Mitt Romney.

Investors are concerned over the U.S. fiscal cliff, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.

Sentiment on the single currency was hit by ongoing uncertainty over when Spain may request a bailout and whether Greece can implement austerity measures in order to secure the next tranche of its bailout funding.

Earlier Friday, a report showed that the final euro zone manufacturing purchasing managers’ index for October came in at 45.4, contracting for the 15th successive month as output and new orders fell.

In the coming week, investors will be anticipating the outcome of Tuesday’s U.S. presidential elections and looking ahead to policy meetings by the Bank of England and the European Central Bank on Thursday.

In addition, market participants will be awaiting any further developments in the handling of the debt crisis in the euro zone.

Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.

Monday, November 4

The euro zone is to produce a report on investor confidence, an important indicator of economic health. Elsewhere, Spain is to publish official data on employment change, a leading indicator of economic health, as well as data on service sector activity.

In the U.S., the Institute of Supply Management is to publish data on service sector activity.

Tuesday, November 6

In the euro zone, Germany is to produce official data on factory orders, a leading indicator of production.

In the U.S, voting in the U.S. presidential elections is to take place.

Wednesday, November 7
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The euro zone is to produce official data on retail sales, the leading indicator of consumer spending, which accounts for the majority of overall economic activity, while Germany is to produce official data on industrial production, a leading indicator of economic health.

The U.S. is to publish government data on crude oil stockpiles.

Thursday, November 8

In the euro zone, the eurogroup of finance ministers are to hold talks in Brussels to discuss financial issues in the bloc. In addition, the ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with ECB President Mario Draghi to discuss the monetary policy decision.

Also Thursday, the U.S. is to publish official data on the trade balance as well as the weekly government report on initial jobless claims.

Friday, November 9

In the euro zone, France and Italy are to release official data on industrial production.

The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment, a leading indicator of economic health.