Daily Price Outlook
The EUR/USD pair ended the day at $1.1332 after reaching a high of $1.1360 and a low of $1. 1331.The EUR/USD surged on Wednesday as risk appetite returned to the market and supported the Euro against the US dollar, which was on the back foot. The US dollar was weak across the board on Wednesday as it lost its safe-haven appeal after risk sentiment turned on in the market. The US Dollar Index, which measures the greenback's value against the basket of six major currencies, fell to 95.93 levels and weighed on the US dollar, ultimately pushing the EUR/USD pair higher.
The market's risk appetite returned after the latest comments from the Director of the Centers for Disease Control and Prevention allayed concerns about the Omicron variant and its impact on the economy. Rochelle Walensky said that despite the rising number of infections in the United States due to the rapid spread of the Omicron variant, the rates of hospitalization and deaths were comparatively low compared to the Delta variant.
The fact that Omicron was 70% more transmissible than other variants of the coronavirus but was less severe than the Delta variant pushed optimism in the market that it might not affect the global economic recovery as previously anticipated. This ease of concern added risk appetite, which ultimately pushed riskier currencies higher in the market, including the Euro. The strength of the Euro then moved the EUR/USD pair higher and helped it recover most of its previous losses.
The US dollar was also low across the board amid the unfavorable macroeconomic data release. At 18:30 GMT, the Goods Trade Balance declined to -97.8 billion against the anticipated -89.0 billion and weighed the US dollar. The prelim wholesale inventories decreased by 1.2% against an estimated 1.5% and supported the US dollar. At 20:00 GMT, the pending home sales fell by 2.2% against the predicted 0.6% and weighed on the US dollar. The declining US dollar added further gains to the currency pair EUR/USD.
At 14:00 GMT, the M3 Money Supply fell to 7.3%, against the forecasted 7.6%, and weighed on the Euro from the European side. Private loans remained flat at 4.2%. The EUR/USD's gains were limited on Wednesday due to unfavorable European macroeconomic data.
EUR/USD Intraday Technical Levels
Daily Technical Levels
Pivot Point: 1.1330
EUR/USD - Technical Outlook
The EUR/USD spike tested the 1.1368 resistance level and reversed immediately to trade at the 1.1325 level. It’s currently trading at the 1.1326 level, gaining immediate support at the 1.1290 mark. A breakout of 1.1290 level exposes the EUR/USD pair towards 1.1277 or 1.1234 support zone.
On the flip side, the break above the 1.1330 level exposes the EUR/USD price towards the next resistance area of 1.1386 or 1.1424 level. The RSI and Stoch are holding in a sell zone, while the 50 days simple moving average supports an uptrend in EUR/USD pair. Investors are likely to keep an eye on 1.1330 to stay bearish below and bullish above the same level. All the best!
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