Technical Analysis

EUR/USD Analysis – June 16, 2021

By LonghornFX Technical Analysis
Jun 16, 20214 min

Big Day -Eyes on FED Monitory Policy Meeting

The EUR/USD was closed at $1.2124 after placing a high of $1.2149 and a low of $1.2100. EUR/USD posted minor gains on Tuesday and remained green for the second consecutive session. During the early trading session, the EUR/USD remained higher, but after the release of U.S. macroeconomic data, the currency pair lost some of its gains and left them unchanged.

The U.S. Dollar Index that measures the greenback value against its rival currencies rose to its one-month highest level at 90.68 and gave strength to the greenback that ultimately caped further upward momentum in the EUR/USD currency pair. On the data front, at 11:00 GMT, the German Final CPI for May remained flat with the expectations of 0.5%. At 11:45 GMT, the French Final CPI for May also came in line with the expectations of 0.3%. At 14:00 GMT, the Trade Balance dropped to 9.4B against the projected 14.9B and weighed on Euro, which capped further EUR/USD pair.

From the U.S. side, at 17:30 GMT, the Core Retail Sales in May declined to -0.7% against the estimated 0.4% and weighed on the U.S. dollar that pushed EUR/USD higher. The PPI in May rose to 0.8% against the predicted 0.5% and supported the U.S. dollar that limited the gains in EUR/USD. In May, the Retail Sales dropped to -1.3% against the anticipated -0.6% and weighed on the U.S. dollar that pushed EUR/USD higher. The Core PPI also rose to 0.7% against the estimated 0.5% and supported the U.S. dollar that limited the rising prices of EUR/USD.

The Empire State Manufacturing Index decreased to 17.4 against the estimated 22.2 and weighed on the U.S. dollar, adding further gains in EUR/USD. At 18:15 GMT, the Industrial Production in May surged to 0.8% against the projected 0.6% and supported the greenback. The Capacity Utilization Rate remained flat with the forecasts of 75.2%. At 19:00 GMT, the Business Inventories declined to -0.2% against the expected-0.1% and supported the U.S. dollar. The NAHBB Housing Market was reduced to 81 against the anticipated 83 and weighed on greenback that added gains in EUR/USD.

The central bank of the U.S. will announce its latest decision on monetary policy on Wednesday, where the Fed is expected to maintain its accommodative policy throughout the year. However, as the labor market has shown improvements and the economic growth has started moving towards recovery, there are chances that the rising price pressures would force Fed to start thinking about tapering the asset purchases. These hopes also kept market participants cautious from placing any strong bid ahead of the decision. Hence, the U.S. dollar remained primarily flat and kept the currency pair EUR/USD consolidated.


EURUSD Intraday Technical Levels**

Support Resistance

1.2099 1.2148

1.2075 1.2173

1.2050 1.2196

Pivot Point: 1.2124

EUR/USD - Technical Outlook

The technical side of the EUR/USD pair hasn't changed a lot as the pair continues to trade at the 1.2128 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. Although the technical side isn't offering anything new, today's primary focus will remain on the U.S. monitory policy meeting. It has the potential to drive sharp price action in the U.S. dollar and related currency pairs. All the best!


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