Double Top Pattern Extends Resistance
A day before, the single currency Euro closed at $1.1872 level after placing a high of $1.1880 and a low of $1.1855. The EUR/USD currency pair managed to recover most of its last daily losses in a single day amid the renewed weakness in the U.S dollar. The declining U.S. Treasury yields that reached their lowest level since February 14 at 1.25% weighed heavily on the greenback and dragged it against the basket of six major currencies. The European Central Bank raised its inflation goals and said it might let the inflation overshoot the target for a while. After an 18-months strategy review, the policymakers agreed to seek consumer-price growth of 2% over the medium-term with an asymmetric aim.
On Sunday, the ECB President Christine Lagarde announced that the central bank would renew its direction on monetary stimulus at its following meeting and intimated that a new policy might be launched in 2022 to support the European economy to succeed in the contemporary bond-buying plan. During the previous week, the ECB revised its stand on inflation, possibly providing CPI to soar higher than its 2% goal if the circumstance delivers.
Besides Europe, the U.S. is due to report inflation numbers for June, whereas, on Wednesday and Thursday, the Federal Reserve Chairman Jerome Powell is set to testify in the presence of Congress. Powell may potentially provide hints on the central bank’s thought over tapering.
Furthermore, China will deliver second-quarter GDP figures on Thursday amid worries they could disappoint, given a swift easing in monetary policy during the previous week. The number of Covid-19 cases proceeds to grow in considerable sections of Asia. At the same time, the U.S. had the most cases since mid-May as the delta variant covers limited vaccinated areas of the nation.
This strategy review was the first by the ECB since 2003, which included a changed inflation goal to the symmetric target of 2% along with ECB allowing a transitory period in which inflation could remain moderately above the target. The climate change considerations will also be included in monetary policy operations. The new strategy will be applied to start with July 22 monetary policy meeting. The Governing Council has intentions to assess its strategy periodically with the next assessment projected for 2025. The single currency Euro gained strength against the U.S. dollar after the release of strategy review from the European Central Bank and pushed EUR/USD higher on board.
On the data front, at 11:00 GMT, the German Trade Balance reduced to 12.6B against the forecasted 15,8B and weighed on Euro that further capped gains in EUR/USD. From the U.S. side, at 17:30 GMT, the Unemployment Claims from the U.S. for last week rose to 373K against the predicted 345K and weighed on the U.S. dollar that added further gains in EUR/USD pair.
EUR/USD Intraday Technical Levels
Support Resistance
1.1794 1.1879
11746 1.1916
1.1708 1.1964
Pivot Point: 1.1831
EUR/USD - Technical Outlook
The EUR/USD pair is trading with a slightly bullish bias at the 1.1877 level, facing immediate resistance at the 1.1879 level. A bullish crossover of 1.1879 level can expose the EUR/USD pair until the next resistance area of 1.1908. At the same time, the support continues to hold around the 1.1850 mark. The 50 periods EMA supports the EUR/USD pair at the 1.1840 level, and the odds of a bullish bias remain strong over this level. The traders will be keeping their eyes on the 1.1879 level as a violation of this can expose the pair towards the 1.1908 level. All the best!
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