Pivot Point to Provide Support at 1.1540
On Wednesday, the EUR/USD currency pair is trading with a bullish trend at 1.1552 level. It’s heading towards next resistance level of 1.1557 that we can see on the chart below. During Tuesday’s trading session, the EUR/USD pair oscillated back and forth around the 1.1550 level. This area has been increasingly crucial over the last few days, as it appears that we are battling to get above the floor, but the 1.15 level seems to be providing some support.
Breaking down below that level will open the door to considerably lower pricing, possibly as low as 1.1250 in the long run. That stated, this is most likely about the US dollar rather than the Euro, though there are some developments in the European Union worth noting.
Weakness in U.S. Dollar Support the EUR/USD
Raphael Bostic, President of the Atlanta Federal Reserve Bank, stated on Tuesday that U.S. inflation was beyond the Federal Reserve’s target of 2%. Policymakers must be cautious to avoid causing long-term forecasts to become unanchored as a result of pandemic-induced pressures.
He believed that pandemic-related pricing patterns would eventually reverse. He was concerned, though, that some supply chain disruptions would linger longer than projected. According to him, the Fed’s staff may stop referring to inflationary pressures as temporary because they are likely to persist beyond the Federal Reserve’s 2 percent target.
As per Fed Vice Chair Richard Clarida, the price stability mandate’s considerable further progress threshold has been more than met. The employer mandate, on the other hand, has not yet been completed. He believes the Fed should start slowing down its bond purchases shortly. Clarida also mentioned that the Fed’s tapering programme could be completed by the end of 2022.
EUR/USD Intraday Technical Levels
Pivot Point: 1.1540
EUR/USD – Technical Outlook
On Wednesday, the EUR/USD currency pair was trading at the 1.1550 level and it was gaining immediate support at the 1.1540 level. On the hourly chart, the EUR/USD has violated the upward channel and symmetrical triangle pattern. Both of these patterns supported the EUR/USD pair at the 1.1555 level, and now this level is working as a solid resistance.
The closing of a Doji candle below the 1.1550 level is weakening the EUR/USD’s bullish bias. Typically, in such scenarios, bulls start profit-taking to avoid losing gains in the wake of a bearish correction.
The breakout above the 1.1555 level exposes the EUR/USD towards the 1.1575 level, and the continuation of the further upward trendline exposes the pair towards the 1.1586 level. On the downside, the breakout of the 1.1540 support level exposes the EUR/USD towards the next support areas of 1.1537 and 1.1496.
The RSI and MACD are in support of a buying trend. Therefore, the bullish bias dominates above the 1.1540 level today. All the best!