German Final Manufacturing PMI Ahead!
The EUR/USD was closed at $1.1855 after placing a high of $1.1910 and a low of $1.1845. EUR/USD currency pair continued its bearish streak for the 6th consecutive session on Wednesday amid the rebounded strength in the U.S. dollar, and the prompted risk-off market sentiment.
The U.S. dollar was strong across the board on Wednesday as the DXY reached above 92.4 level and helped the greenback gain traction against its rival single currency Euro. The reason behind the strength in the greenback could be better-than-expected jobs report from the U.S. Labour Department on Wednesday that showed a higher than expected job creation in June.
On the data front, at 11:45 GMT, the French Consumer Spending for May surged to 10.4% against the forecasted 7.4% and supported the single currency Euro and further caped loss in EUR/USD pair. The French Prelim CPI for June remained flat with projections of 0.2%. At 12:55 GMT, the German Unemployment Change dropped to -38K against the forecasted -20K and supported the single currency Euro with limited EUR/USD pair losses. At 14:00 GMT, the CPI Flash Estimate for the year also remained flat, with projections of 1.9%. The Core CPI Flash Estimate for the year also remained unchanged from the expected 0.9%. Italian Prelim CPI dropped to 0.1% against the forecasted 0.2% and weighed on the single currency Euro that added further loss in EUR/USD.
From the U.S. side, at 17:15 GMT, the ADP Non-Farm Employment Change for June rose to 692K against the forecasted 555K and supported the U.S. dollar that added extra loss in EUR/USD. At 18:45 GMT, the Chicago PMI for June dropped to 66.1 against the forecasted 70.2 and weighed on the U.S. dollar and limited the downward momentum in EUR/USD. At 19:00 GMT, the Pending Home Sales surged to 8.0% against the expected -1.1% and supported the U.S. dollar that dragged EUR/USD pair further on the downside.
The U.S. dollar gained traction even after declining U.S. treasury yields and a rebound in Wall Street stock indices. The yield on the benchmark 10-year note dropped to its lowest since June 21 at 1.45% whereas, the Dow Jones rose by 0.45%. However, the U.S. Dollar Index rose and reached 92.45 level and continued its bullish streak for 4th consecutive session. The strength in the greenback added pressure on the currency pair EUR/USD and increased its losses for the day.
Furthermore, the rising number of cases around the globe due to the highly transmissible Delta variant of the coronavirus raised fears in the market as countries have re-imposed restrictions to stop the spread. The economic recovery concerns prompted the safe-haven appeal that added further strength to the already rising prices of the safe-haven greenback. Hence, the riskier currency pair EUR/USD faced pressure.
EUR/USD Intraday Technical Levels
Support Resistance
1.1830 1.1895
1.1805 1.1935
1.1765 1.1961
Pivot Point 1.1870
EUR/USD - Technical Outlook
The EUR/USD is trading with a bearish bias at the 1.1845 level as the major currency pair has violated the support level of 1.1875. The direct currency pair may face resistance at the 1.1916 level that's being extended 50 periods EMA. The EUR/USD is closing a bearish engulfing candle on the 4-hour timeframe that typically demonstrates strong bearish sentiment among investors. The 50 periods EMA will be there to extend resistance at the 1.1918 mark. Conversely, the 1.1848 support level breakout can expose the EUR/USD pair towards 1.1811 and 1.1774 levels today. All the best!
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