Technical Analysis

EUR/USD Analysis – November 30, 2021

By LonghornFX Technical Analysis
Nov 30, 20213 min

Daily Price Outlook

The EUR/USD was closed at $1.1291 after placing a high of $1.1316 and a low of $1.1258. EUR/USD dropped for another session on Monday and extended its loss as the US dollar gained traction in the market. The US Dollar Index rose and reached the 96.44 level, which added strength to the US dollar and dragged EUR/USD to the downside. The soaring concerns over the spread of the new Omicron variant added to the inflows of the US dollar amid its safe-haven status, which pushed the greenback higher in the market.

Recently, the World Health Organization (WHO) designated Omicron a variant of concern and said that it was working with many researchers worldwide to find out how it could impact the COVID-19 pandemic. Several disease experts have said that Omicron will render the vaccine less effective; hence, the news raised concerns in the market and many countries, including the US, Canada, UK, Italy, France, Germany, and much more, to impose travel restrictions. First discovered in South Africa, the variant has reached Canada, Denmark, Netherland, and many other countries. The market's uncertainty about whether the Omicron variant was more severe than the Delta variant added in the risk-off market sentiment and dragged the riskier currency pair EUR/USD to the downside.

On the data front, the German Prelim CPI dropped in November to -0.2%, against the predicted -0.4%, and supported the euro, which capitulated further losses in EUR/USD. At 13:00 GMT, the Spanish Flash CPI for the year also surged to 5.6% against the predicted 5.5% and supported the euro, which limited the downfall in EUR/USD. On the US side, at 20:00 GMT, Pending Home Sales rose in October to 7.5%, versus the expected 0.8%, bolstering the US dollar and adding to the EUR/USD pair's losses.

Furthermore, on Monday, European Central Bank President Christine Lagarde said that the eurozone was fully equipped to face the economic influence of a new wave of COVID-19 viruses or the Omicron variant. These comments came in after several European countries imposed travel restrictions to curb the spread of this new variant as there were many new cases reported in Europe. The rising spread of the Omicron variant in the European countries added a negative impression on the single currency euro, adding further downside pressure on the EUR/USD pair.

EUR/USD Intraday Technical Levels

Support Resistance

1.1276 1.1312

1.1260 1.1332

1.1240 1.1347

Pivot Point: 1.1296

EUR/USD - Technical Outlook

The EUR/USD pair encountered sellers around the 23.6 percent retracement of its November slide at 1.1305, the pair's immediate resistance level. The daily chart reveals that the pair resumed its drop after correcting oversold circumstances, with technical indicators returning to negative territory. The 20 SMA has continued to fall, and it is now over the next Fibonacci resistance.

In the short term, the EUR/USD is staying above a modestly bullish 20 SMA, while technical indicators have corrected from overbought levels and turned flat inside positive levels, according to the 4-hour chart. However, the bearish potential is limited for the time being, albeit a greater loss could be predicted if the price breaks below 1.1245, the nearest support level. All the best!


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