Technical Analysis

EUR/USD Analysis – December 14, 2021

By LonghornFX Technical Analysis
Dec 14, 20213 min

Daily Price Outlook

The EUR/USD ended the day at $1.1283 after reaching a high of $1.1321 and a low of $1.1259. The EUR/USD declined on Monday and lost all of its previous session's gains amid the strength of the greenback and the fresh Omicron variant risks. The Euro was under pressure as the likelihood of the EU becoming the epicentre of the new COVD variation, Omicron, grew.

According to the European Center for Disease Prevention and Control, the new strain found at the end of November has already been detected in 70 countries, with at least 6430 confirmed cases worldwide. Because European countries were among the first to record cases, the variation is dominant throughout Europe.

Meanwhile, the World Health Organization also updated its warning against the Omicron variant and said that the new variant posed a very high global risk because of some evidence that it evades vaccine protection. According to WHO, preliminary evidence is that the number of people getting reinfected with the virus has increased in South Africa. However, considerable uncertainties remain surrounding the Omicron variant, and its mutation might lead to higher transmissibility and more coronavirus cases. The warning from WHO added further pressure on the market's risk sentiment and weighed on riskier currencies like the Euro, which ultimately dragged down the EUR/USD pair.

The US Dollar Index rose on Monday and reached a 96.44 level. The dollar's strength could be attributed to the fact that investors had started taking positions before the Fed monetary policy meeting this week. Although there were no expectations about interest rate hikes from the Fed or any other central bank this week, the focus of traders shifted towards the meeting, and, hence, the greenback gained strength.

There were no macroeconomic figures to be released from the US on Monday on the data front. At 12:00 GMT, the German WPI remained flat with an expected 1.3%. At 14:00 GMT, the Italian Quarterly Unemployment Rate dropped to 9.2%, against the expected 9.4%, and supported the Euro, which capped further losses in the EUR/USD pair.

Additionally, European traders kept a close eye on the upcoming ECB monetary policy meeting this week. The ECB is expected to cut its asset purchases by half this week, and this thing has also been supporting the Euro, which kept the losses in EUR/USD limited for the day.

EUR/USD Intraday Technical Levels

Daily Technical Levels

Support Resistance

1.1255 1.1317

1.1227 1.1349

1.1194 1.1378

Pivot Point: 1.1288

EUR/USD - Technical Outlook

The EUR/USD is trading choppy in a tight trading range of 1.1288 – 1.1265. It’s currently trading at 1.1279, having dropped below the pivot point support level of 1.1288 level. The formation of hourly candles below this level supports a selling bias in the EUR/USD. On the downside, the EUR/USD pair is heading lower towards the 1.1260 support level. The breakout of the 1.1260 level can extend a selling bias until 1.1228 and 1.1198 levels.

On the other hand, the breakout of the 1.1316 level exposes the EUR/USD towards 1.1347 and the 1.1375 level. The RSI is holding in a neutral zone; therefore, the bearish correction dominates below the 1.1288 level. All the best!


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