EUR/USD Analysis - April 26, 2021

Double Bottom Support

The EUR/USD closed at 1.2100 after placing a high of 1.2100 and a low of 1.2012. After posting losses for three days, the EUR/USD pair rebounded strongly and reached its highest since March 3 at a 1.2100 level. The EUR/USD exchange rate spiked higher on Friday amid the weakness in the US dollar. In early European trading hours, the US dollar remained weak across the board as investors turn their attention onto next week’s Federal Reserve meeting. Furthermore, the single currency Euro was also strong in Friday’s European session due to better than expected macro-economic data from the Europe side.

The US Dollar Index that traces the greenback versus a basket of six other currencies fell on Friday to its lowest since March 3 at 90.81 and weighed heavily on the US dollar, ultimately pushing EUR/USD pair higher. Nevertheless, the US dollar picked up some strength after analysing American macro-economic data during the second half of the day.

At 12:15 GMT, the French Flash Services PMI in April surged to 50.4 against the forecasted 46.6 and supported single currency Euro that added further strength in EUR/USD pair. The French Flash Manufacturing PMI remained flat with the projected 59.2. At 12:30 GMT, German Flash Manufacturing PMI increased to 66.4 against the forecasted 65.8 and supported Euro that added further gains in EUR/USD pair. German Flash Services PMI dropped in April to 50.1 against the predicted 51.1 and weighed on Euro that capped further EUR/USD pair gains. At 13:00 GMT, the Flash manufacturing PMI from the whole bloc surged to 63.3 against the anticipated 62.0 and supported Euro and pushed EUR/USD pair higher. The Flash Services PMI surpassed the expectations of 49.1 and came in as 50.3 giving strength to Euro that added further upward momentum in EUR/USD exchange rate.

From the US side, at 18:45 GMT, the Flash manufacturing PMI for April remained flat with the forecasts of 60.6. The Flash Services PMI surged in April to 63.1 against the projected 61.6, supported the US dollar, and capped further EUR/USD pair gains. At 19:00 GMT, the New Home Sales in March surged to 1021K against the expected 885K and supported the US dollar, and limited the upward trend in EUR/USD pair. The EU member countries started to administer Johnson & Johnson’s coronavirus vaccine after Europe’s drug regulator backed the single-dose shot. The European Medicines Agency announced a possible link to rare blood clotting disorder and stressed that the benefit of shot outweighed the risks. This will assist speed up the vaccination process in the EU and support economic recovery. These optimistic hopes raised optimism and supported the single currency Euro that added further EUR/USD pair gains.

On Friday, the European Central Bank President Christine Lagarde said that the European monetary authority has plans to keep interest rates and coronavirus stimulus constant. She added that the bloc’s economy was still on crutches and in need of support from both central bank and government spending as the Eurozone was undergoing extended lockdowns.

EURUSD Intraday Technical Levels

Support Resistance

1.1982 1.2059

1.1949 1.2103

1.1904 1.2136

Pivot Point: 1.2026

EUR/USD - Technical Outlook 

The EUR/USD continues to trade bullish at 1.2109 level, having disrupted the double top pattern at 1.2077 level. On Friday, the EUR/USD pair managed to violate the narrow trading range of the pair of 1.2077 – 1.1998 level. A bullish breakout of 1.2077 has opened up additional room for buying until the next resistance level of 1.2141 and 1.2240. However, the RSI and MACD are in overbought territories, suggesting odds of bearish correction in the pair. On the lower side, the EUR/USD can find support at the 1.2077 level. The upward channel is supporting bullish bias in the EUR/USD pair. Traders will be keeping their eyes on the 1.2026 level today. All the best!