Technical Analysis

EUR/USD Analysis - April 27, 2021

By LonghornFX Technical Analysis
Apr 27, 20214 min

Double Bottom Support

The EUR/USD pair was closed at 1.2079 after placing a high of 1.2117 and a low of 1.2061. EUR/USD pair reached its highest level since March 26 on Monday during the first half of the day but reversed from there and ended its day with losses amid prevailing risk-off market sentiment. The U.S. Treasury yields on a 10-year note tried to reach near 1.60% level on Monday and placed a high of 1.59%. Simultaneously, the U.S. Dollar Index that measures the greenback's value against the basket of six major currencies remained flat throughout the day at 90.88 level.

The U.S. dollar was weak on Monday amid the upcoming decision of the Federal Reserve monetary policy meeting on Wednesday. The speech of U.S. President Joe Biden is also expected on Wednesday that will also provide signals for the next move in EUR/USD pair. The single currency Euro was also under pressure on Monday after the release of German IFO Business Climate data that failed to meet the market's expectations in April and dragged the EUR/USD pair even lower.

On the data front, at 13:00 GMT, the German Ifo Business Climate for April declined to 96.8 against the forecasted 97.8 and weighed on the single currency Euro that added in the losses of EUR/USD pair. At17:58 GMT, the Belgian NBB Business Climate for April surged to 4.4against the anticipated 1.7 and supported single currency Euro that capped further losses in EUR/USD pair.

At 17:30 GMT, Core Durable Goods Orders for March remained flat with the expectations of 1.6% from the U.S. side. Durable Goods Orders in March dropped to 0.5% against the estimated 2.5% and weighed on the U.S. dollar that limited the downward momentum in EUR/USD pair.

Being a risk-sensitive currency pair, EUR/USD dropped on Monday after risk-off market sentiment continued rising aid the surging number of coronavirus cases around the world. The global tally for the COVID-19 infections reached 147 million on Monday, with 3.11 million deaths caused by the virus. It raised the global economic recovery concerns and demand for haven, resulting in declining prices of riskier assets like EUR/USD pair for the day.

On the other hand, the European Union launched legal action against the coronavirus vaccine manufacturer AstraZeneca. The commission said that the reason behind suing the company was for not respecting its vaccine supply contract and for not having a reliable plan to ensure timely deliveries. Meanwhile, the European Commission also said that its coronavirus vaccine drive was now on the course to secure 70% inoculation of the E.U.'s adult population by mid-July. On Sunday, the chief of the E.U.'s vaccine task force said that the bloc would produce enough vaccines to achieve herd immunity of the region's adult population by mid-July. These comments from the E.U. commission kept the single currency stronger against the U.S. dollar and capped further EUR/USD pair losses.

EURUSD Intraday Technical Levels

Support Resistance

1.2086 1.2095

1.2083 1.2101

1.2076 1.2105

Pivot Point: 1.2092

EUR/USD - Technical Outlook

The technical side of 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!


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