Bullish Retracement in Play
The EUR/USD closed at $1.2106 after placing a high of $1.2196 and a low of $1.2092. EUR/USD currency pair extended its losses on Friday and dropped to its lowest since May 14 on the back of rising strength in the U.S. dollar. The EUR/USD currency pair faced pressure on Friday amid the rebound in the U.S. dollar that gathered strength after an upbeat U.S. CPI data release from the U.S. Labor Department. Another factor involved in the greenback strength on Friday was the latest report from the University of Michigan, which suggested increasing consumer confidence and pushed dollars higher that kept the EUR/USD pair under pressure.
The U.S. Dollar Index reached the 90.60 level on Friday as the U.S. Treasury yields rose and turned green after falling for six consecutive sessions. The discussions about easing bond purchases due to increasing inflationary pressures could further increase the yields on 10-year Treasuries. Furthermore, due to the economic boom in the U.S., the dollar also has an upside potential for the short-term that suggested further pressure over EUR/USD.
On the data front, at 11:00 GMT, the German WPI in May surged to 1.7% against the expected 0.9% and supported the single currency Euro that further capped losses in EUR.USD pair. At 13:00 GMT, the Italian Quarterly Unemployment Rate declined to 10.4% against the projected 10.5% and supported Euro, limiting the downward momentum in EUR/USD pair.
On the U.S. front, at 19:00 GMT, the Prelim UoM Consumer Sentiment in June surged to 86.4 against the predicted 84.1 and supported the U.S. dollar that added further loss in EUR/USD currency pair. On the other hand, the Prelim UoM Inflation Expectations remained unchanged at 4.0%.
On the other hand, Euro remained under pressure as the cases of the Delta variant of the coronavirus first detected in India continued to surge in Europe. The rising number of infections urged Boris Johnson to postpone lifting all restrictions on June 21. This also weighed on the single currency Euro and added further downside pressure on EUR/USD pair. On June 16, the Federal Reserve will announce its monetary policy decision where the central bank is highly anticipated to maintain its current policy despite a sharp surge in the prices. Fed officials have repeatedly said that rising inflation would be temporary as it came in because of the prompted demand and supply chain lags. It means the chances that talks about tapering will be discussed during this meeting are very low.
EURUSD Intraday Technical Levels
Support Resistance
1.2104 1.2114
1.2099 1.2119
1.2094 1.2124
Pivot Point: 1.2109
EUR/USD - Technical Outlook
The EUR/USD pair is trading with a bullish bias at the 1.2139 level, facing immediate resistance at the 50% Fibonacci correction level of 1.2145. Bullish crossover of 1.2142 level exposes the EUR/USD price towards 61.8% Fibonacci retracement level of 1.2154. On the downside, the pair’s support stays at 1.2131 and 1.2116 levels. The 50 periods EMA suggests an upward trend in the EUR/USD pair and supports it at the 1.2124 level. The MACD has crossed over 0 levels, supporting a bullish trend in the EUR/USD pair. The pair’s support holds at 1.2131 and 1.2116 while the resistance stays at 1.2142 and 1.2154 levels. All the best!
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.