EUR/USD Analysis - April 23, 2021

Double Bottom Support

The EUR/USD pair was closed at 1.2015 after placing a high of 1.2070 and a low of 1.1993. EUR/USD pair remained depressive on Thursday and continued its bearish streak for 3rd consecutive session after U.S. Dollar Index turned positive and ECB maintained a dovish stance.

On Thursday, Euro slipped against the U.S. dollar after the dovish comments from the European Central Bank. The bank indicated that it was in no hurry to reduce its emergency bond purchases despite prevailing optimism over a robust economic recovery.

The ECB (European Central Bank) left its benchmark interest rate at 0.0% as widely expected in its monetary policy meeting and said it would stick with plans to accelerate emergency bond purchases until March 2022 to keep bond yields steady. In its monetary policy statement, ECB noted that the Governing Council expected to continue the purchases under PEPP at a significantly higher pace over the current quarter of this year. The President of the central bank, Christine Lagarde, also downplayed the notions that the central bank would look at tapering bond purchases as it was simply premature. He also added that any changes to the program would be data-dependant. After these dovish comments, the EUR/USD pair continued declining and posted losses for the day.

On the data front, at 18:30 GMT, the Consumer Confidence from Europe dropped to -8 against the projected -11 and supported single currency Euro that capped further losses in EUR/USD pair. From the U.S. side, at 17:30 GMT, the Unemployment Claims from the last week dropped to 547K against the estimated 607K and supported the U.S. dollar, and weighed on EUR/USD pair. At 19:00 GMT, the C.B. Leading Index surged to1.3% against the projected 1.0%, supported the U.S. dollar, and added further losses in EUR/USD. The Existing Home Sales dropped in March to 6.01M against the anticipated 6.18M and weighed on the U.S. dollar that capped further losses in EUR/USD.

On the U.S. front, the greenback remained strong on board despite declining U.S. Treasury yields. The U.S. Dollar Index rose on Thursday and reached a 91.42 level, while the U.S. Treasury yields on a 10-year note dropped to 1.5310.

EURUSD Intraday Technical Levels

Support Resistance

1.2005 1.2052

1.1979 1.2071

1.1959 1.2098

Pivot Point: 1.2025

EUR/USD - Technical Outlook 

The EUR/USD’s trading bias is bullish as the pair is trading at a 1.2020 level. Overall, the trading range of the pair is being limited to 1.2077 – 1.1998 level. A bullish breakout of 1.2077 level opens up further room for buying until the next resistance level of 1.2141 and 1.2240. Conversely, the bearish breakout of an upward channel at the 1.1998 level exposes the EUR/USD pair towards 1.1940 and 1.1877 support levels. So far, the exponential moving averages are in support of a buying trend. However, the histograms of MACD are becoming smaller than the previous ones, suggesting weakness in bullish bias. Today, the trader’s primary focus will remain on the Flash Manufacturing PMI and Flash Services PMI figures from the European countries such as France and Germany, the business hubs. Economists are expecting a slight dip in economic data that can drive a bearish breakout in the pair and vice versa. All the best!