EUR/USD Analysis – December 15, 2021

Daily Price Outlook

The EUR/USD was closed at $1.1257 after placing a high of $1.1327 and a low of $1.1253. EUR/USD dropped for the second consecutive session on Tuesday and extended its decline mainly because of the strength of the US dollar ahead of the Fed meeting. The US dollar was high on board and weakened its rival currencies like Euro as the monetary policy decision from the Fed meeting was coming closer.

On Wednesday, Fed will start its 2-day policy meeting in which officials will decide whether to increase the pace of reducing bond purchases. Market participants were betting that fed would move forward with accelerating the bond tapering pace to wrap up the process until March 2022. These hints had already been provided by Fed Chairman last week, and investors were behaving accordingly and taking positions in the market to benefit from the actual announcement.

These bets pushed the US dollar higher in the market at the 96.59 level while the US treasury yield on the benchmark 10-year note also increased and reached 1.47%, which supported the rising prices of the greenback and had a negative impact on EUR/USD. Meanwhile, the losses in EUR/USD were subdued as the positive news from the pandemic front came forth and helped risk currencies. Pfizer-BioNTech reported that two shots of its vaccine provide 70% protection against Omicron hospitalization and 33% protection against infection. The company also reported that its experimental COVID-19 pill, named Paxlovid, was also effective against Omicron. This optimism supported the market's risk appetite and capped further losses in the EUR/USD pair.

On the data front, at 15:00 GMT, industrial production from Europe dropped in October by 1.1% against the projected 1.2% and weighed on the Euro. That dragged EUR/USD further to the downside. At 16:00 GMT, the NFIB Small Business Index remained unchanged at 98.4. At 18:30 GMT, the PPI in November rose to 0.8% against the predicted 0.5% and supported the US dollar. The Core PPI also increased to 0.7% against the anticipated 0.4% in November and supported the US dollar. The strong US dollar then weighed on the prices of the currency pair EUR/USD.

EUR/USD Intraday Technical Levels

Daily Technical Levels

Support Resistance

1.1231 1.1305

1.1206 1.1352

1.1158 1.1378

Pivot Point: 1.1279

EUR/USD - Technical Outlook

The EUR/USD is trading at the 1.1269 level, gaining immediate support at 1.1253. The break below the 1.1253 level exposes the pair towards the next support level of the 1.1230 level. Further on the lower side, the next support stays at 1.1208 or 1.1162.

On the upper hand, the pivot point extends resistance at the 1.1278 level. The break above this level exposes the EUR/USD towards the 1.1303 or 1.1348 level. The RSI is holding in a neutral zone; therefore, the bearish correction dominates below the 1.1278 level. All the best!