Technical Analysis

EUR/USD Analysis – June 01, 2021

By LonghornFX Technical Analysis
Jun 1, 20214 min

Manufacturing PMI in Highlights!

After declining and moving red for three consecutive sessions, EUR/USD reversed its course on Monday and started a new week green amid weak U.S. dollar. The currency pair EUR/USD reached the 1.2233 level and recovered most of its previous 3-day losses at the starting day of the week. Euro turned positive against the U.S. dollar as the greenback came under fresh pressure after inflation bets increased following the release of the PCE Price Index. The U.S. Dollar Index fell to 89.84 level and remained below 90 through most of the day, indicating heavy selling pressure surrounding the greenback. The U.S. Treasury yields on a 10-year note also fell and reached 1.58% that added further downward pressure on the U.S. dollar and helped EUR/USD pair move higher for the day.

There was no macroeconomic data released from the United States on the data front due to the central bank holiday, but from the European side, following economic figures were released that had an impressive impact on the movement of the single currency Euro. At 12:00 GMT, the German Prelim CPI surged to 0.5% against the expected 0.3% and supported the single currency Euro and added further EUR/USD pair. The Spanish Flash CP for the year also rose to 2.7% against the projected 2.4% and supported the single currency Euro and pushed EUR/USD higher. At 13:00 GMT, the M3 Money Supply for the year declined to 9.2% against the forecasted 9.6% and weighed on the single currency Euro and caped further gains in EUR/USD.

Private Loans for the year rose to 3.8% against the predicted 3.4% and supported Euro and added further gains in EUR/USD pair. At 14:00 GMT, the Italian Prelim CPI dropped to 0.0% against the projected 0.1% and weighed on Euro and limited the rising EUR/USD pair prices.

Meanwhile, on Monday, the EU Commission said that the reduction in deliveries of coronavirus vaccines from Johnsons & Johnsons to EU member states was only temporary, and the company was still due to meet its contract for total doses by the end of this year.

A spokesman for the European Union executive told a news conference that member states were informed of certain delays in the delivery of J&J shots and expressed concerns. The reduction was temporary, and full deliveries will recover soon. After this news, the Euro saw a renewed strength against the U.S. dollar and added further EUR/USD pair gains.

Furthermore, the tensions between the U.S. and EU rose over the weekend after Danish public broadcaster Danmarks Radio said that the United States used a partnership with Denmark's foreign intelligence unit to spy on European leaders, including German Chancellor Angela Merkel.

According to the report, the findings were the results of an internal investigation conducted by the Danish Defence Intelligence Service in 2014 & 2015. The U.S. and Director of National Intelligence (DNI) officers have declined to comment on this report. However, after this report, EUR/USD saw a surge in its prices.

EURUSD Intraday Technical Levels

Support Resistance

1.2184 1.2200

1.2177 1.2209

1.2168 1.2216

Pivot Point: 1.2193

EUR/USD - Technical Outlook

The EUR/USD pair has begun trading bullish at the 1.2238 level, facing next resistance at the 1.2263 level. On the 4 hour timeframe, the resistance level is extended by a double top pattern at 1.22653 level, and breakout of this extends upward movement until 1.2348 level. The pair has concluded series of Doji and bullish engulfing candlesticks that are suggesting bullish bias among investors. On the downside, the pair's support stays at 1.2205 and 1.2133 level. The bullish bias remains dominant today. All the best!


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