Downward Channel In-Play
The EUR/USD was closed at $1.1864 after placing a high of$1.1875 and a low of $1.1806. After declining continuously for seven days, the EUR/USD pair broke its bullish streak and reversed its course later. The pair dropped to its lowest since April 06 on Friday during the first half of the day; however, after the release of U.S. macroeconomic data, the currency pair started moving in the opposite direction and ended its day with minor gains. On Friday, the U.S. Dollar Index (DXY) remained under pressure and broke its seven-day bullish streak after the fears of Delta variant rises, and the U.S. jobs report data came in not-as-expected. The DXY reached 92.74 in the first half of the day but reversed its movement and turned down to 92.24 level on Friday after the release of the U.S. jobs report. The U.S. Treasury Yields on a 10-year note also fell to 1.42% after continuously declining for five consecutive sessions.
On data fronts, at 11:45GMT, the French Government Budget Balance was released as -118.8B. At 12:00 GMT, the Spanish Unemployment Change came in as -166.9K against the forecasted -110.5K and supported the single currency Euro and further caped loss in EUR/USD. AT 14:00 GMT, the PPI for May surged to 1.3%against the projected 1.2% and supported single currency Euro and limited the downward momentum in EUR/USD. From the U.S. side, at 17:30 GMT, the Average Hourly Earnings for June remained flat with the projections of 0.3%. The Non-Farm Employment Change rose to 850K against the expected 725K and supported the U.S. dollar that added loss in EUR/USD. The Unemployment Rate from June surged to 5.9% against the estimated 5.6% and weighed on the U.S. dollar and limited the downward trend in EUR/USD. The Trade Balance from May remained unchanged at -71.2B. At 19:00 GMT, the Factory Orders in May also remained flat with the predictions of 1.7%.
Meanwhile, countries across Europe were scrambling to accelerate their vaccination coverage to outpace the spread of deadly and highly infectious Delta variants of the coronavirus. Europe had plans to open up its economy for tourists in the summer holidays. Still, the rising number of coronavirus cases across the EU nations prompted governments to speed up the process of coronavirus vaccination. The main concern of the EU was to prevent its hospitals from filling up again with patients fighting for their lives and to avoid it, and the European nations started to race against the Delta variant of the coronavirus.
According to the European Centre for Disease Control, the risk of infection from the delta variant was high to very high for partially or unvaccinated communities. It is also estimated that the variant will account for 90% of cases in the EU’s 27 nations by the end of August. The ECDC warned that it was crucial to progress with the vaccine rollout at a very high pace. These concerns also kept the single currency Euro under pressure, and hence, EUR/USD pair suffered on Friday.
EUR/USD Intraday Technical Levels
Support Resistance
1.1851 1.1867
1.1845 1.1877
1.1835 1.1882
Pivot Point: 1.1861
EUR/USD - Technical Outlook
On Monday, the EUR/USD is trading with a bullish bias at the 1.1849 level. On the hourly timeframe, the 50 periods EMA is supporting the pair at the 1.1849 level. Recently, the EUR/USD pair has formed a bullish engulfing candle that’s supporting buying trend. On the upper side, the EUR/USD’s next resistance stays at the 1.1879 level, and a bullish crossover of this level can expose the pair towards the 1.1910 level. The MACD is holding a buying zone and can drive more upward momentum in the market. Traders will be keeping an eye on the 1.1850 support level today as the bullish trend dominates over this level. All the best!
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