EUR/USD Analysis – November 10, 2021

Eyes on US CPI Figures

The EUR/USD closed at $1.1591 after setting a high of $1.1609 and a low of $1.1569. The EUR/USD pair extended its gains and pushed its prices higher for the third consecutive session as the US dollar was weak across the board. The US Dollar Index, which measures the value of the greenback against a basket of six major currencies, fell on Tuesday to 93.88 levels as Fed Chairman Jerome Powell said on the day that the central bank was looking at a wide range of indicators in gauging how close the economy was to reaching full employment.

The dollar was low on board even though the Fed will begin later this month to remove the first pillar of extraordinary stimulus it introduced in March 2020 to shield the economy from the COVID-19 pandemic when the massive bond-buying starts tapering. At 12:05 GMT, the German Trade Balance was 13.2B against the forecasted 14.2B and weighed on the single currency Euro, which capitulated further gains in the EUR/USD pair. At 12:45 GMT, the French trade balance declined to -6.8B against the forecasted-7.0B and supported the single currency euro, adding further gains in EUR/USD. At 15:00 GMT, the ZEW Economic Sentiment surged to 25.9 against the projected 20.6 and supported the Euro. That added support to the currency pair EUR/USD. The German ZEW Economic Sentiment surged to 31.7 against the forecasted 20.3 and supported the Euro, further gaining the EUR/USD pair.

On the US front, at 16:00 GMT, the NFIB Small Business Index declined to 98.2 against an estimated 99.4 and weighed on the US dollar, which added further gains in EUR/USD. At 18:30 GMT, the PPI remained flat with projections of 0.6%. The Core PPI decreased to 0.4% from the forecasted 0.5%, which added pressure on the US dollar, which pushed EUR/USD higher.

On Tuesday, the European Central Bank said that the demand for eurozone real estate was likely to remain high, driving up prices and raising affordability issues for poorer households. The bank reported that after most of the global economy shut down during the pandemic, the rate of household savings increased, and some families, particularly wealthier ones, looked to real estate as a place to put cash they could not spend otherwise.

The ECB reported that the increased interest in the property was due to easier access to credit in the future and declining mortgage rates. These comments from the ECB had little to no impact on the single currency euro, as investors were more focused on the declining USD prices and the upcoming inflation data from the US side this week.

EUR/USD Intraday Technical Levels

Support Resistance

1.1571 1.1611

1.1550 1.1630

1.1531 1.1650

Pivot Point: 1.1590

EUR/USD - Technical Outlook

On Wednesday, the EUR/USD's technical side was mostly unchanged as the pair continued to trade choppy in between a narrow trading range of 1.1610 – 1.1570. The EUR/USD has crossed below the intraday pivot point level of 1.1590, and now it's facing strong support at the 1.1571 level. The closing of candles below the 1.1590 level supports a selling trend in the EUR/USD.

On the bullish side, the violation of the 1.1603 level exposes the EUR/USD towards the 1.1621 level. Furthermore, on the higher side, the violation of the 1.1621 level could lead the pair towards the 1.1647 mark. The MACD and RSI support a buying trend but suggest a bearish correction in the pair. Thus, the bearish bias dominates below the 1.1590 level and vice versa. All the best!