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Technical Analysis

EUR/USD Analysis – November 25, 2021

Daily Price Outlook

During Thursday’s Asian trading session, the EUR/USD currency pair succeeded in stopping its bearish bias and picking up bids to refresh its daily top at 1.1211. The currency pair dropped to a fresh low since July 2020 the previous day before bouncing off the 1.1186 level. However, the gains in the major pair have appeared after the US dollar was down on Thursday morning in Asia.
The dollar was lower, but it was at a five-year high against the yen. The hawkish tone of the US FED last meeting minutes contrasted with its Japanese counterpart’s dovish stance. Apart from this, the positive MACD signals provided further support to the EUR/USD recovery moves. Furthermore, the focus now shifts to the minutes of the European Central Bank’s (ECB) meeting, due later today.

On the same day, ECB president Christine Lagarde will deliver a speech at an ECB legal conference, including board members Frank Elderson and Edouard Fernandez-Bollo. In contrast to this, more than 70,000 new coronavirus infections have been reported in Germany, the largest one-day increase on record, with some places still to report. The EUR/USD is likely to be under some downward pressure as a result of this report. The EUR/USD is currently trading at 1.1214, representing a 0.15 percent increase.

However, the ECB minutes and remarks from various ECB policymakers, including President Christine Lagarde, are expected to keep the euro on edge ahead of the ECB minutes and policy divergence between the Fed and the ECB. Following Austria’s announcement of a statewide lockdown last week, France is expected to declare new covid measures, as a government official warned that the country’s Covid-19 incidence rate is expected to exceed 200 per 100K in the next days. Whereas, allegations are circulating that Germany is planning to impose stricter Covid-19 restrictions, possibly even a complete shutdown, in the wake of record daily infections and rising pressure on hospitals.

The broad-based US dollar was lower at the USD front, but it was still near a five-year high against the yen. The hawkish tone of the US Federal Reserve’s minutes from its most recent meeting contrasted with its Japanese counterpart’s dovish stance. In its minutes issued on Wednesday, the Fed warned that it might accelerate its asset cutting program and boost interest rates sooner than planned if rising inflation persists. Shorter duration yields and, as a result, the dollar will continue to be supported by hawkish comments from Fed official Mary Daly, as well as Fed minutes reflecting a desire for faster tapering and earlier rate hikes.

Due to the US markets closing for the holiday on Thursday, all eyes are on the European Central Bank’s meeting minutes, expected later in the day. ECB president Christine Lagarde will speak at an ECB legal conference on the same day, as will board members Frank Elderson and Edouard Fernandez-Bollo.

EUR/USD Intraday Technical Levels

Support Resistance
1.1172 1.1241
1.1144 1.1282
1.1103 1.1310
Pivot Point: 1.1213

EUR/USD – Technical Outlook

The EUR/USD bullish bias seems get stronger as the pair managed to break over the 1.1213 pivot point level. On the 4-hour timeframe, the EUR/USD has also violated a descending trend pattern that was extending resistance at 1.1215. The increased demand in EUR/USD, as well as the break through the 1.1249 barrier, exposes the pair to 1.1273 or 1.1298. Alternatively, a break below the 1.1224 level exposes the EUR/USD pair towards the 1.1212 and 1.1190 levels on the bearish side. The RSI and stochastic are holding in a buy zone. Therefore, the EUR/USD’s trading bias remains bullish above 1.1210 and vice versa. All the best!