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Technical Analysis

EUR/USD Analysis – June 11, 2021

European Manufacturing Production Ahead!

The EUR/USD closed at $1.2169 after placing a high of $1.2195 and a low of $1.2142. EUR/USD currency pair remained lower for the day amid the unchanged monetary policy from the European Central Bank and higher than expected U.S. CPI data. ECB held its June policy meeting on Thursday and decided to leave the interest rates and ease unchanged. They said that they would continue providing their support to the economy through different programs. Whereas, the President of ECB, Christine Lagarde, offered mixed remarks and suggested that price pressures were subdued and that it would be too early to start discussing tapering.

On Thursday, the central bank provided no signal about when it might start declining its stimulus program. The bank also revealed its expectations that inflation might remain below its target in the foreseeable future. According to Christine Lagarde, inflation has been rising over the few months, mainly on the back of base effects, increase in energy prices, and transitory factors. Inflation is likely to rise further in the second half of the year until the temporary factors start fading out. This forced ECB to remain supportive of the economy as a retreat could accelerate a concerning rise in borrowing costs and affect the recovery.

On the data front, at 10:30 GMT, the French Final Private Payrolls for the quarter surged to 0.5% against the expected 0.3% and supported the single currency Euro. At 11:45 GMT, the French Industrial Production in April dropped to -0.1% against the expected 0.5% and weighed on the Euro and added loss in EUR/USD pair. At 13:00GMT, the Italian Industrial Production surged to 1.8% against the projected 0.3% and supported Euro that further caped upside in EUR/USD.

From the U.S. side, at 17:30 GMT, the Consumer Price Index from May rose to 0.6% against the anticipated 0.4% and supported the U.S. dollar and added further downward momentum in EUR/USD. The Core CPI from May also surged to 0.7% against the predicted 0.5%, supported the U.S. dollar, and pushed EUR/USD higher. The Unemployment Claims from last week soared to 376K against the estimated 370K and weighed on the U.S. dollar. At 23:00 GMT, the Federal Budget Balance declined to -132.0B against the estimated -245.0B and weighed on the U.S. dollar, limiting the further decline in EUR/USD.

The U.S. dollar also remained stressed on Thursday despite the better-than-expected U.S. inflation data. The U.S. Bureau of Labor and Statistics published that CPI climbed to 5% in May every year from April’s 4.2 and supported the U.S. dollar. However, the weekly jobless claims made by the Americans showed a hike during last week and weighed on the greenback. The U.S. dollar Index remained red for the day and dropped below 90 levels amid the sharp decline in U.S. benchmark Treasury yields, which fell to 1.47%. Despite the weak U.S. dollar for the day, the currency pair EUR/USD remained depressed throughout Thursday amid ECB policy results.

EURUSD Intraday Technical Levels

Support Resistance
1.2159 1.2208
1.2140 1.2238
1.2110 1.2256
Pivot Point: 1.2189

EUR/USD – Technical Outlook

The technical side of the EUR/USD pair remains primarily unchanged as the pair maintains a narrow trading range of 1.2215 – 1.2170 level. On the 4-hour timeframe, the EUR/USD pair has closed a symmetrical triangle pattern that’s suggesting indecision among traders. The EUR/USD pair crosses over 50 periods EMA, suggesting odds of a bullish trend continuation. The MACD indicator is tossing above and below zero, demonstrating neutral sentiment among the traders. The EUR/USD’s immediate resistance stays at 1.2215 and 1.2258 levels along with a support level of 1.2170 and 1.2140 level. All the best!