14.11.202006:50 Forex Analysis & Reviews: The dollar and the euro are separated by a river of uncertainty, and time is running out against the pound

News about progress in the development of a vaccine against COVID-19 and the deterioration of the epidemiological situation in the world compete for the right to determine the dynamics of global markets.

Key stock indices sell-off after touching local highs.

A similar picture is observed in the foreign exchange market.

Having failed to gain a foothold above 1.1900 at the very beginning of the week, the EUR/USD pair rolled back to the level of 1.1750, after which it returned to the area of 1.1800.

The euro is losing about 0.6% over the week, helping the USD index to show a weekly increase of 0.7%.

"The greenback is no longer showing the one-sided decline that was observed earlier. News about the vaccine from Pfizer and BioNTech set the bar high for future market expectations. Excessive optimism today may then turn into disappointment if further trials of the vaccine show weaker results. Also, even if the vaccine is completely successful, it may be difficult to produce and distribute it," Bloomberg experts said.

The coronavirus continues to advance on both sides of the Atlantic.

In the EU and the US, the second wave of the disease caused the re-introduction of social restrictions to stop the spread of COVID-19.

"Now we see the other side of a huge river of uncertainty. But I don't want to exaggerate the excitement about the vaccine and future vaccination, because there is still uncertainty," ECB President Christine Lagarde said.

A similar opinion is held by the head of the Federal Reserve Jerome Powell.

"Progress in the development of a COVID-19 vaccine is certainly good and welcome news in the medium term, but there remains significant uncertainty about the timing, production, distribution, and effectiveness of the vaccine," he said.

The nearest strong resistance for EUR/USD is located near 1.1820, and while it is holding the pair back, the bears will try to push the pair to 1.1790, and then to the area of 1.1745-1.1750. Breaking the mark of 1.1740 will bring the levels of 1.1720 and 1.1700 into play.

However, a break above 1.1830 will neutralize the "bearish" forecast and target the pair at 1.1850 and further - at 1.1880.

The GBP/USD pair retreated from two-month highs around 1.3300 to weekly lows near 1.3110. This is not surprising, given the quarantine in the Foggy Albion, the lack of progress in Brexit negotiations, and the weakness of the UK's GDP and industrial production figures for the third quarter.

New restrictive measures in the United Kingdom are only in effect for a week, and the daily rate of coronavirus infection in the country is hitting anti-records. As of Thursday, the number of new cases of COVID-19 infection in Britain was 33,470, compared to 22,950 recorded a day earlier.

According to preliminary estimates, the British economy in the third quarter declined by 9.6% in annual terms. Experts predicted its reduction by 9.4%.

Industrial production in the country in September increased by 0.5% compared to August, instead of the expected increase of 0.8%. In annual terms, the indicator decreased by 6.3%, while the forecast was for a decrease of 6.1%.

Meanwhile, trade talks between London and Brussels have stalled again.

The EU still believes that the UK seeks exclusive access to the common market, but does not want to obey the same standards and rules. Foggy Albion, in turn, accuses the Alliance of still trying to bind the United Kingdom to itself and does not recognize Brexit.

According to experts, the existing differences between the parties increase the likelihood that no trade deal will be concluded before the end of the transition period on December 31.

Thus, the GBP/USD pair retains the potential for further decline. If the sales increase, the first line of defense for the pair may be the area of 1.2900. A deeper correction can send it to 1.2700, where the 200-day moving average and the 61.8% Fibonacci retracement line from the March-September growth are located.