EUR/USD Analysis – October 11, 2021

Pivot Point Resistance at $1.1567

During Monday's Asian trading session, the EUR/USD currency pair succeeded in stopping its previous-session downward rally and drew some fresh modest bids around the $1.1585 level, even after the risk barometer represented the market's indecision amid mixed clues concerning the US Federal Reserve's (Fed) next moves and the China-linked headlines.

In addition to this, the broad-based US dollar strength, backed by risk-off sentiment, has also failed to have any meaningful bearish impact on the EUR/USD currency pair so far. Other than the US dollar's performance, a lack of transparency among the European Central Bank (ECB) board members concerning the central bank's next move seems to weigh on the EUR/USD prices. Alternatively, the modest upticks in the currency pair were mainly sponsored by the recently improving covid conditions in Europe. Meanwhile, the hopes for more stimulus in the US seem to challenge the market risk-of mood, which may further support the EUR/USD currency pair.

At this particular time, the EUR/USD currency pair is trading at 1.1585 and consolidating in the range between 1.1564 and 1.1588. Despite the optimism over the improving covid conditions in the West, the market trading sentiment failed to stop its early-day bearish performance. The mixed clues concerning the US Federal Reserve's (Fed) next moves and the China-linked downbeat headlines tend to undermine the market trading sentiment.

On the other hand, the long-lasting Sino-American tussles over phase one deal commitments put some further downside pressure on the market. Moreover, Hong Kong and Taiwan face challenges from China and add to the risk-off mood. Other than the US-China headlines, a lack of clarity among the European Central Bank (ECB) board concerning the central bank's next move joins the policymakers' reflation fears to weigh on the market trading mood. However, the negative appearance of the US stock futures tends to highlight the risk-off sentiment, which was seen as one of the major events to put pressure on any further gains in the EUR/USD currency pair.

The broad-based US dollar extended its early-day bullish rally and rose sharply against its major peers on the first day amid risk-off market sentiment. Furthermore, the uptick in the US dollar was further bolstered by the upbeat prints of September's Unemployment Rate and Average Hourly Earnings. The Unemployment Rate fell to 4.8%, against 5.1% expected and 5.2% prior, soothing the pains, while Average Hourly Earnings also surged past 0.4% expected and revised down previous readouts of 0.4% to 0.6%. Thus, the US dollar bullish bias capped the upside for the EUR/USD pair.

Alternately, the recently improving COVID conditions in Europe seem to put some breaks on the currency pair's initial downside bias. Meanwhile, the US debt ceiling extension and hopes for more stimulus keep challenging the market's upbeat mood, which was one of the key factors that pushed the EUR/USD currency higher.

Given the thin calendar and US holiday, risk catalysts will be the key for fresh momentum ahead of Wednesday's inflation data from Germany, the US, and Federal Open Market Committee (FOMC) Minutes for the latest monetary policy meeting.

EUR/USD Intraday Technical Levels

Support Resistance

1.1548 1.1593

1.1522 1.1612

1.1503 1.1637

Pivot Point: 1.1567

EUR/USD - Technical Outlook

On Monday, the EUR/USD currency pair is trading at 1.1586 level and it’s gaining immediate support at 1.1567 level. This particular support is extended by an intraday pivot point level of 1.1563, as we can also see on the chart above. A break below this level exposes the pair to the 1.1548 and 1.1522 levels. On the higher side, the breakout of the 1.1586 level exposes the EUR/USD pair towards 1.1612 and 1.1637.

On Monday, the market priced in the better-than-expected unemployment rate and average hourly earnings data from the United States. While the EUR/USD is being supported by worse-than-expected nonfarm payroll data.

The RSI and MACD are in support of a buying trend. Therefore, the bullish bias dominates above the 1.1567 level today. All the best!