Technical Analysis

EUR/USD Analysis – Aug 04, 2021

By LonghornFX Technical Analysis
Aug 4, 20212 min

38.2% Fibonacci Retracement Supports

The EUR/USD was closed at $1.1860 after placing a high of $1.1894 and a low of $1.1853. EUR/USD dropped for the third consecutive session on Tuesday however remained steady for the day. From the U.S. side, at 18:45 GMT, The Final Manufacturing PMI remained flat with the projections of 63.4. At 19:00 GMT, the ISM Manufacturing PMI declined in July to 59.5 against the anticipated 60.8 and weighed on the U.S. dollar that limited the loss in EUR/USD.

For June, the Construction Spending also dropped to 0.1% against the forecasted 0.4% and weighed on the U.S. dollar that further caped decline in EUR/USD. The ISM Manufacturing Prices fell to 85.7 against the expected 87.9 and weighed on the U.S. dollar, and helped EUR/USD reduce its daily loss.

Meanwhile, on Monday, U.S. Federal Reserve Governor Christopher Waller said that the Federal Reserve could start tapering of asset purchases as early as October if the job employment data falls in a range of 800,000 and 10,000,000 for the next two months.

Waller suggested that if jobs data falls in this range during August and September, it would mean that the U.S. economy had reached near the pre-pandemic level and would force the central bank to reduce its bond purchases worth $120 billion per month. These comments during late American hours added strength to the depressed U.S. dollar and dragged the currency pair EUR/USD.

EUR/USD Intraday Technical Levels

Support Resistance

1.1851 1.1890

1.1835 1.1913

1.1811 1.1930

Pivot Point: 1.1874

EUR/USD - Technical Outlook

The technical side of the EUR/USD pair hasn't changed a lot, as the EUR/USD continues to trade sideways between a narrow trading range of 1.1900 – 1.1845 level. On the upper side, the resistance stays at the 1.1900 level. On the 4-hourly chart, the EUR/USD pair has already violated the downward trendline that's now extending support at the 1.1850 level. A bearish breakout of this support level can expose the EUR/USD pair towards 1.1810 support. That's where the 50 M.A. (moving average) stays and can trigger a bounce off in the EUR/USD. However, the bearish crossover below this level can expose the EUR/USD pair towards the 1.1760 support level. The bullish bias dominates the EUR/USD above 1.1850 today. On Wednesday, the investor's focus will stay on the U.S. ADP figures as this may offer them further clues about the EUR/USD trend. All the best!


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