EUR/USD Analysis – November 18, 2021

Pivot Point Breakout

The EUR/USD closed at $1.1368 after setting a high of $1.1375 and a low of $1.1314. After declining for seven consecutive sessions, EUR/USD reversed course and surged on Thursday amid the reduced strength of the US dollar. The US Dollar Index slipped for the second consecutive session and reached as low as 95.52, which added strength to the currency pair EUR/USD as both have a negative correlation. Meanwhile, the US Treasury yield on the benchmark 10-year note also dropped on Thursday and reached 1.57%, which added to the further decline in the US dollar and helped EUR/USD continue its upward momentum for the day.

On the data front, there was no macroeconomic data release from the European side, while from the US side, at 18:30 GMT, the Philly Fed Manufacturing Index surged to 39.0 against the forecasted 24.2 and supported the US dollar, which ultimately capped further gains in the EUR/USD pair. Unemployment Claims increased to 268K last week, up from 260K expected, weighing on the US dollar and adding to the EUR/USD pair's gains. At 20:0 GMT, the CB Leading Index also surged to 0.9% against the forecasted 0.8% and supported the US dollar, which limited the gains in the EUR/USD currency pair.

The reduced strength of the US dollar due to increased jobless claims added to the momentum of the EUR/USD currency pair on Thursday. According to Chicago Federal Reserve President Charles Evans, it will take until the middle of next year to complete the Fed's wind-down of its bond-buying program. He said that it might take until mid-2022 to complete the tapering of asset purchases.

Furthermore, Atlanta Federal Reserve President Raphael Bostic said on Thursday that he believes the Fed could start increasing interest rates in the middle of next year when the US labor market will regain its pre-pandemic levels. All these comments from Fed officials kept a lid on US dollar gains and supported the rising prices of the EUR/USD pair on Thursday.

On the flip side, many European nations have started considering implementing new lockdowns to curb the rising rates as winter looms. The number of coronavirus cases has already risen in European countries, and fears of new lockdown restrictions are spreading across the continent, putting pressure on the single currency euro and limiting EUR/USD gains on Thursday.

EUR/USD Intraday Technical Levels

Support Resistance

1.1329 1.1390

1.1291 1.1413

1.1268 1.1451

Pivot Point: 1.1352

EUR/USD - Technical Outlook

The technical side of the EUR/USD continues to exhibit a neutral bias among traders. The pair is trading at the 1.1357 level, and it’s facing resistance at the 1.1375 level. The EUR/USD has recently crossed over the pivot point level of 1.1353, supporting a bullish trend in the pair.

The closing of candles below the 1.1375 level supports the selling trend in the EUR/USD pair. At the same time, the immediate support stays at the 1.1333 level, which is being extended by the November 18, 2021, low level.

The breakout of the 1.333 level exposes the pair towards 1.1277, 1.1236, and 1.1208. At the same time, the EUR/USD’s immediate resistance stays at the 1.1374 level. A break above this level exposes the pair towards the 1.1393 and 1.1454 levels. All the best!