Technical Analysis

EUR/USD Analysis – October 12, 2021

By LonghornFX Technical Analysis
Oct 12, 20213 min

Pivot Point Resistance at $1.1562

The EUR/USD pair ended the day at $1.1551 after reaching a high of $1.1588 and a low of $1.1549.The EUR/USD pair declined and extended its loss for the second consecutive session on Monday amid the stronger U.S. dollar in the market.

The greenback was high against its rival currencies at 94.40 amid expectations of tapering stimulus measures by the Federal Reserve despite dismal jobs data on Friday. Furthermore, the 10-year Treasury note yield rose to its highest level since late May, reaching 1.62%, providing additional support to the U.S. dollar, dragging the EUR/USD pair lower.

The currency pair EUR/USD was also lower on the board as the risk-off mood surrounded the whole market and weighed on riskier assets. The China-linked fears joined Brexit headlines, and mixed concerns about Fed tapering after a slowdown in jobs growth added pressure on risk appetite.

The market sentiment was challenged by the fresh Sino-American tussle over phase-one deal commitments. The challenges that Hong Kong and Taiwan have faced from China have also reduced risk appetite and weighed on a riskier asset like the EUR/USD.

Furthermore, the market participants were perplexed by the disappointing U.S. Nonfarm Payroll and the favorable unemployment rate and average earnings. Some believe that dismal payroll data will have a negative impact on the U.S. dollar as the Fed might not go for tapering. Whereas some believe that the Fed will go through tapering this year despite dismal jobs data, This confusion also kept risk appetite lower in the market, and hence, EUR/USD remained on the back foot.

There was no macroeconomic data release from the U.S. amid bank holidays due to Columbus Day on the data front. However, from the European side, at 13:00 GMT, the Italian industrial production from August dropped to-0.2% against the forecasted-0.4% and supported the single currency Euro and capped further loss in the EUR/USD pair.

Meanwhile, the Euro, the single currency, was already under pressure due to the prevailing energy crisis on the continent. Additionally, ECB President Christine Lagarde said on Friday that rising energy prices and supply disruptions could hold back growth. There was a need to manage the exit from the pandemic carefully. These concerning comments from the central bank president added further pressure on the single currency and dragged the EUR/USD pair further to the downside.

EUR/USD Intraday Technical Levels

Support Resistance

1.1536 1.1575

1.1523 1.1601

1.1496 1.1615

Pivot Point: 1.1562

EUR/USD - Technical Outlook

On Tuesday, the EUR/USD currency pair is trading at 1.1566 level and it’s gaining immediate support at 1.1549 level. On the hourly chart, the upward channel supports the EUR/USD at the 1.1549 level. A closing of a bullish engulfing candle is supporting buying trend in the EUR/USD pair. However, the intraday pivot point is likely to be working as a hurdle at 1.1562 level.

The breakout above the 1.1562 level exposes the EUR/USD towards the 1.1575 level, and the continuation of the further upward trendline exposes the pair towards the 1.1586 level. On the downside, the breakout of the 1.1549 support level exposes the EUR/USD towards the next support areas of 1.1537 and 1.1496.

The RSI and MACD are in support of a buying trend. Therefore, the bullish bias dominates above the 1.1562 level today. All the best!


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