EUR/USD Analysis – September 20, 2021

Major Resistance at 1.1745

After hitting a high of $1.1789 and a low of $1.1724, the EUR/USD ended the day at $1.1725. On Friday, the EUR/USD pair fell in the previous ten sessions for the eighth time, reaching its lowest level since August 23rd.

The drop in the currency pair EUR/USD can be linked to the strengthening of the US dollar following the release of the US Retail Sales data on Thursday, which soared unexpectedly in August, adding to predictions of Fed tapering at its forthcoming policy meeting. The US dollar's strength brought the EUR/USD currency pair to its three-week low on the board.

Despite the negative macroeconomic statistics released on Friday, the US Dollar Index, which measures the dollar's value against a basket of six major currencies, surged to 93.25. The yield on the benchmark 10-year note in the United States also increased to 1.38 percent, adding to the strength of the US dollar, which dragged the EUR/USD currency pair lower. Furthermore, the risk-off market mood maintained US government yields higher and stock indices in the 0.26 percent to 1.19 percent range.

On the statistics front, the July Current Account Balance fell to 21.6 billion dollars against a forecast of 22.3 billion dollars, weighing on the single currency Euro and adding to the EUR/USD loss. The Final CPI for the year stayed unchanged at 14:00 GMT, against projections of 3.0 percent. The Final Core CPI was also 1.6 percent, which was in line with expectations.

On the US side, the TIC Long-Term Purchases in July fell to 2.0 billion dollars at 01:00 GMT, versus a forecast of 60.5 billion dollars, weighing on the US Dollar and causing more losses in EUR/USD. The Prelim UoM Consumer Sentiment dipped to 71.0 from 71.9 expected at 19:00 GMT, weighing on the US dollar and limiting the decline in EUR/USD. The Prelim UoM Inflation Expectation for September increased to 4.7 percent from 4.6 percent previously.

Meanwhile, market investors are eagerly awaiting the publication of the Federal Reserve's monthly policy meeting, as they anticipate signals of unwinding stimulus measures that have kept the US currency strong. Furthermore, the rising tensions between China and its Western allies, such as the United States, Australia, and the United Kingdom, weighed on market sentiment and kept riskier assets like the EUR/USD under pressure.

EUR/USD Intraday Technical Levels

Support Resistance

1.1736 1.1807

1.1708 1.1850

1.1666 1.1878

Pivot Point: 1.1779

EUR/USD - Technical Outlook

On Monday, the EUR/USD currency pair is trading with a strong bearish bias at the 1.1706 level. The pair has violated the intraday pivot point level of 1.1745 level. The closing of candles below this level is suggesting a strong selling bias among investors. On the support side, and immediate support prevails at the 1.1701 level whereas a bearish breakout of this support level exposes the currency pair towards the 1.1695 level.

An additional break out of the 1.1694 level can expose EUR/USD prices toward next support level of 1.1635 level. Moreover, the RSI and Stochastic have entered the sell zone. Thus, the EUR/USD's bearish bias dominates below 1.1740 and vice versa. All the best!