Technical Analysis

EUR/USD Analysis – June 03, 2021

By LonghornFX Technical Analysis
Jun 3, 20213 min

EMA Crossover in Play!

The EUR/USD closed at $1.2209 after placing a high of $1.2227 and a low of $1.2163. EUR/USD pair continued its bearish trend for the second consecutive session on Wednesday despite the weak U.S. dollar. The U.S. Dollar Index remained flat on Wednesday at 89.91. The U.S. dollar tried to recover during the early trading session but overturned its course in the late session. Meanwhile, the yield on the benchmark 10-year note also reduced and fell to 1.589%. The weak dollar and lower treasury yield could not reverse the bearish momentum in EUR/USD pair.

On the data front, at 11:00 GMT, the German Retail Sales in April declined to -5.5% against the projected -2.4% and weighed on the single currency Euro that added further loss in EUR/USD pair. At 11:45 GMT, the French Gov Budget Balance showed a deficit of -91.4B in April. At 12:00 GMT, the Spanish Unemployment Change fell short of expectations to -129.4K against the projected -115K and supported Euro that further caped loss in EUR.USD pair. At 14:00 GMT, the PPI for April surged to1.0% against the anticipated 0.9% and supported Euro, limiting the downward momentum in EUR/USD pair. From the U.S. side, at 18:45 GMT, the IBD/TIPP Economic Optimism rose in June to 56.4 against the projected 55.0 and supported the U.S. dollar that added further losses in EUR/USD pair.

On Wednesday, the European Central Bank policymaker Jens Weidmann urged that the central bank should buy fewer bonds from polluting companies under the EB's stimulus programs. As advocated by President Christine Lagarde, the ECB was more likely to adopt some form of green tilt in its multi-billion bond-buying scheme. Weidmann reaffirmed his views that the ECB's priority should be to buy bonds of companies that meet climate-related reporting obligations. Next week on Thursday, ECB will hold its monetary policy meeting. According to analysts from Danske Bank, the meeting will focus on the financing conditions, PEPP implementation and offer a cautiously optimistic view on-demand amid a weak inflation outlook.

Meanwhile, the EUR/USD pair was also under pressure on Wednesday as the market sentiment saw an urge of haven appeal amid the rising concerns over inflation and uneven economic recovery. As EUR/USD currency pair is risk-sensitive, the elimination of risk sentiment from the market weighed heavily on the pair and dragged its prices on the downside.

EURUSD Intraday Technical Levels

Support Resistance

1.2173 1.2237

1.2136 1.2264

1.2109 1.2301

Pivot Point: 1.2200

EUR/USD - Technical Outlook 

The EUR/USD continues to trade bearish amid stronger dollar at 1.2186 level. The direct currency pair has crossed below the 50 periods EMA level on the four hourly timeframes, suggesting strong selling bias among investors and extending resistance at the 1.22066 level. On the 4 hour timeframe, the resistance level was extended by a double top pattern at 1.22653 level. The closing of the "Three Black Crows" pattern 1.2214 resistance level supports bearish sentiment among investors. Therefore, the EUR/USD has taken a bearish reversal, and it's gaining support at the 1.2180 level. Violation of this support level opens up additional room for selling until 1.2165 and 1.2133 support areas. All the best!


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