Technical Analysis

EUR/USD Analysis – November 22, 2021

By LonghornFX Technical Analysis
Nov 22, 20213 min

Daily Price Outlook

The EUR/USD closed at $1.1289 after hitting a high of $1.1374 and a low of $1.1250. The EUR/USD dropped sharply on Friday and reached its lowest since July 2020 amid the rising price of the US dollar. The US dollar was high on board after the DXY reached 96.24, which added further negative pressure on EUR/USD. The US dollar was moving upward and extended its gains as the market mood favored the greenback.

On the other hand, the single currency, the Euro, was under pressure on Friday after countries across the region started planning to implement new lockdown measures. Austria was considering implementing a full lockdown, whereas Germany was also planning to follow in its footsteps. Austria has announced that it will re-impose a fourth lockdown for 20 days starting Monday. All citizens would be required to be vaccinated by February 1, 2022, or else the people would be fined, according to the government.

Meanwhile, the health situation in Germany was deteriorating, forcing the country to consider a complete ban on vaccinated people. The rising number of coronavirus cases in Europe kept the Euro currency under pressure throughout the week, eventually dragging the EUR/USD pair lower on the final day of the week.

There was no data from the US side on the data front, and from Europe, at 12:00 GMT, the German PPI increased to 3.8% against the anticipated 2.0%, which supported the Euro and prevented the further loss in EUR/USD. At 14:00 GMT, the current account also increased to 18.7B against the expected 16.2B, which supported the Euro and limited the decline in EUR/USD.

Meanwhile, the US dollar got further support from the bullish comments by Federal Reserve officials, including Richard Clarida and Christopher Waller. On Friday, Fed officials suggested a faster pace of reducing asset purchases might be appropriate because of the quick economic recovery and increased inflation. The more rapid tapering of asset purchases means the increased possibility of an earlier than expected interest rate hike, which ultimately strengthens the US dollar.

Currently, the FED has suggested that interest rate hikes might start by the middle of next year. The increased strength of the US dollar then added extra negative pressure on the EUR/USD pair and added a further loss in the currency pair.

EUR/USD Intraday Technical Levels

Support Resistance

1.1268 1.1288

1.1260 1.1300

1.1248 1.1308

Pivot Point: 1.1280

EUR/USD - Technical Outlook

The EUR/USD is trading nicely on the defensive and will put the 1.1300 level to the test again towards the week's conclusion.

In the short term, the continuation of the downturn appears to be more likely. Nonetheless, bets on a retest of the 2021 low of 1.1263 remain high (November 17). If this region is lost, spot might be dragged to the round level at 1.1200 before the July 2020 bottom at 1.1185 ahead of 1.1168. (low June 19 2020).

Meanwhile, more losses are possible if the pair trades below the immediate resistance level (off September's high) today near 1.1600. In the long run, the bearish view remains as the price is below the 200-day SMA, which is currently at 1.1857.


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