Technical Analysis

EUR/USD Analysis – Aug 05, 2021

By LonghornFX Technical Analysis
Aug 5, 20213 min

U.S. Unemployment Claims Ahead

The EUR/USD was closed at $1.1835 after placing a high of $1.1901 and a low of $1.1832. EUR/USD currency pair dropped for the 4th consecutive session on Wednesday amid the strength of the U.S. dollar and weakness of the single currency Euro. The U.S. dollar was strong across the board as the U.S. Dollar Index, which measures the greenback's value against the basket of six major currencies, surged on Wednesday and reached 92.31. The rising prices of the U.S. dollar on that day were due to the positive comments from the Federal Reserve Vice Chairman and the higher readings on the ISM Services PMI. The rising prices of the U.S. dollar kept the currency pair EUR/USD lower for the day.

At 12:50 GMT, the French Final Services PMI remained flat with the expectations of 56.8. At 12:55 GMT, the German Final Services PMI dropped to 61.8 against the anticipated 62.2, weighed on Euro, and added further loss in EUR/USD.

At 13:00 GMT, the Final Services PMI from the whole bloc also declined to 59.8 against the forecasted 60.4 and weighed on Euro and dragged the currency pair EUR/USD downside. In June, the Italian Retail Sales plunged to 0.7% against the anticipated 1.9% and weighed on Euro that added the downward momentum of the EUR/USD pair. At 13:29 GMT, the French Gov. Budget Balance Came in as -131.3B compared to the previous -118.8B. At 14:00 GMT, the Retail Sales from June for the whole bloc also reduced to 1.5% against the estimated 1.6%, weighed on the single currency Euro, and added further loss in EUR/USD pair.

From the U.S. side, at 17:15 GMT, the ADP Non-Farm Employment Change for July declined to 330K against the predicted 695K and weighed on the U.S. dollar and capped further decline in EUR/USD currency pair. At 18:45 GMT, the Final Services PMI remained flat with projections of 59.9. At 19:00 GMT, the ISM Services PMI rose to 64.1 against the estimated 60.5, supported the U.S. dollar, and dragged the currency pair EUR/USD further towards the downside.

EUR/USD Intraday Technical Levels

Support Resistance

1.1811 1.1880

1.1788 1.1924

1.1743 1.1948

Pivot Point: 1.1856

EUR/USD - Technical Outlook

The EUR/USD is trading with a bearish bias at the 1.1835 level, having violated the 50% Fibonacci retracement and support level of 1.1835. Closing of candle below 1.1835 level is adding extra selling pressure on the EUR/USD pair. Therefore, the pair's bearish is stronger below 1.1835, and it's exposed towards the next support level of 1.1820 level. On the 4-hour timeframe, the EUR/USD is heading lower to complete 61.8% Fibonacci retracement, and failure to violate this level can trigger a buying trend in the EUR/USD pair. The pair has crossed below 50 periods moving average that's now pressing the pair at 1.1845 level, and further selling can be seen in the pair. All the best!


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