Double Top Resistance at 1.1810
After hitting a top of $1.1803 and a low of $1.1734, the EUR/USD pair was ended at $1.1793. On Friday, the EUR/USD currency pair soared to its highest level since August 13th, owing to the recent sell-off in the US dollar and improving risk sentiment. The US Dollar Index, which calculates the greenback's strength against a range of six major currencies, sank to weekly lows of 92.6 on Friday, putting pressure on the greenback and helping the EUR/USD currency pair finish the day stronger.
The rapid response of investors to Powell's latest speech could be blamed for the dollar's depreciation. Market participants expected the Fed Chair to give some signals about slowing asset purchases at the Jackson Hole conference, but he didn't, instead of sticking to the central bank's previous stance. The US dollar gained strength. As a result, they were pushing the EUR/USD pair upward. The US dollar gained strength; as a result, pushing the EUR/USD pair upward on Friday.
During his speech at the annual conference, Powell stated that the US economy was improving but that there were still risks linked with the Covid-19 pandemic due to the Delta strain. He stated that he previously believed the Fed would begin tapering asset purchases by the end of the year, but that the soaring spread of coronavirus among Delta variants has raised concerns. The Fed will now closely monitor incoming data and economic risks before beginning to taper asset purchases. These remarks dashed investors' hopes for any hint of a pullback in stimulus measures, putting pressure on the US dollar and pushing the EUR/USD currency pair higher.
On the data front, German Import Prices in July rose to 2.2 percent, vs a forecast of 1.2 percent, bolstering the single currency Euro and adding to the EUR/USD pair's gains. The Core PCE Price Index for July stayed unchanged at 17:30 GMT, with forecasts of 0.3 percent. The July Goods Trade Balance showed a deficit of -86.4 billion dollars, vs. a forecast of -90.8 billion dollars, supporting the US dollar and limiting EUR/USD advances. Personal Income increased by 1.1 percent in July vs. a forecast of 0.2 percent, bolstering the US dollar and capping further advances in EUR/USD. In July, personal spending fell to 0.3 percent, down from 0.4 percent expected, weighing on the US dollar and adding to the EUR/USD currency pair's gains.
The Prelim Wholesale Inventories decreased to 0.6 percent in July, vs. a forecast of 1.0 percent, which boosted the US dollar and hurt the EUR/USD. August's Revised UoM Consumer Sentiment fell to 70.3 from 70.9 expected at 19:00 GMT, weighing on the US dollar and pushing EUR/USD higher. In August, the Revised UoM Inflation Expectations stayed unchanged from the previous month, at 4.6 percent.
On the other hand, the increased risk-on-market sentiment strengthened the mood around riskier assets like the EUR/USD. The currency pair rose again on Friday as the UAE reopened its borders to vaccinated tourists from all around the world. The reopening of borders all across the globe boosted market optimism because it will aid global economic recovery. The rise in risk-on-market sentiment contributed to the EUR/advances USD's on Friday.
EUR/USD Intraday Technical Levels
Pivot Point: 1.1796
EUR/USD - Technical Outlook
The EUR/USD is trading with a bullish bias at the double top resistance level of 1.1810 level. On the 4-hour timeframe, this level marks a double top pattern and continuation of an upward trend that exposed the pair towards the next resistance levels of 1.1820 and 1.1844 levels. In addition to this, further upward movements could expose the pair towards 1.1887 levels.
On the downside, the breakout of support level of 1.1777 exposes the pair towards 1.1734 and 1.1710 levels. The RSI is holding in an overbought zone, and typically such a situation drives a selling trend in the market. Therefore, the traders will be keeping their focus on the 1.1810 level, as above this, the bullish bias dominates and vice versa. All the best.
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