EUR/USD faces obstacles to making a run at this year's 1.2014 highs, but it received some help on Friday after unexpectedly strong U.S. employment data nL1N2HR3CM initially reversed the profit-taking pullback in the S&P 500 that had slowed its advance beyond October's 1.18805 peak.
Uncertainty regarding the U.S. election, particularly control of the Senate nL1N2HS0DA, is a hindrance, leaving markets puzzled about whether to price out the pre-election assumption of a Democratic sweep of the White House and Congress, which was expected to deliver massive pandemic relief but also higher corporate and capital gains taxes.
Momentum is with dollar bears and EUR/USD bulls, a cohort already well populated by long speculative positions.
Short-term overbought signals plus pre-weekend position squaring may delay a 1.19 breakout.
A close above 1.1900 would get juices flowing for another run at this year's 1.2014 peak.
But between here and there is the downtrend line from 2011, now near 1.1950.
Given EUR/USD's reasonably positive correlation to the S&P 500 and currently no correlation the 10-year Bund-Treasury yield spreads, new record highs in S&Ps may be key to EUR/USD clearing this year's 1.2014 high.
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