Technical Analysis

EUR/USD Analysis – July 27, 2021

By LonghornFX Technical Analysis
Jul 27, 20213 min

CB Consumer Confidence in Focus

The EUR/USD was closed at $1.1799 after placing a high of $1.1818 and a low of $1.1763. After falling for three consecutive sessions, EUR/USD finally turned green on Monday amid the weakness in the U.S. dollar ahead of the Fed policy meeting.

The EUR/USD pair moved higher on Monday after some improvement in the risk sentiment that triggered weakness in the U.S. dollar. The U.S. stocks also surged on Monday as NASDAQ reached a new record high while the Dow Jones was down by 0.21%. However, the whole stock market was performing better during Monday's trading session. The U.S. yields also fell to 1.22% before heading back to 1.27% and kept the U.S. dollar under pressure, ultimately pushing EUR/USD pair higher.

The reduced strength of the U.S. dollar triggered a recovery in the EUR/USD pair as the macroeconomic data from the European side was also not in favour of the single currency. On the data front, at 13:00 GMT, the German ifo Business Climate for July decreased to 100.8 against the projected 102.3 and weighed on the single currency Euro and further capped gains in EUR/USD. At 17:59 GMT, the Belgian NBB Business Climate for July remained flat with the expected 10.1. From the U.S. side, at 19:00 GMT, the New Home Sales in June declined to 676K against the estimated 800K and weighed on the U.S. dollar that added further upside momentum in the EUR/USD pair.

The greenback was on the back foot before the Federal Reserve monetary policy this week. On Wednesday, the Fed is expected to release the monthly policy statement that will mention the achieved economic recovery and provide hints on the interest rate and asset purchases. The press conference of Powell followed by the statement will also be observed closely to find clues about QE tapering options.

The European stocks remained lower on Monday, pushing the single currency higher and helped EUR/USD to move upward. Investors were also looking ahead to the key meeting of the U.S. Federal Reserve, which triggered weakness in the U.S. dollar and added further gains in EUR/USD.

The risk-off market sentiment was somewhat decreased on Monday as the investors get used to the concerns of an economic recovery driven from the fears of the Delta variant of the coronavirus. The rising number of coronavirus cases across the continent surged by the highly transmissible delta variant urged many countries to re-impose social restrictions. However, the risk sentiment improved a little and added strength in the riskier currency pair EUR/USD.

EUR/USD Intraday Technical Levels

Support Resistance

1.1768 1.1823

1.1738 1.1848

1.1713 1.1878

Pivot Point: 1.1793

EUR/USD - Technical Outlook

On Tuesday, the EUR/USD has violated the narrow trading range of 1.1800 – 1.1750, and now it's trading at 1.1800 level. The direct currency pair EUR/USD has crossed above 50 SMA (simple moving average) on the hourly chart supporting the pair at the 1.1785 level. The triple top pattern is still intact and extending resistance at 1.1823 levels. A bullish breakout of 1.1823 level can expose the EUR/USD price towards the next resistance level of 1.1845. The support continues to hold at the 1.1786 level. It's the same level that worked as resistance on Monday. A breakout of 1.1786 support level exposes the EUR/USD price towards the 1.1760 level today. Let's wait for the CB Consumer Confidence to predict further EUR/USD pair trends. All the best!


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