EUR/USD Analysis – October 14, 2021

Pivot Point to Provide Support at 1.1580

On Thursday, the EUR/USD currency pair is trading with a bullish trend at 1.1588 level. However, it’s heading towards next support level of 1.1580that we can see on the chart below. In September 2021, as measured by the year-over-year rise in the consumer price index (CPI), Germany's inflation rate was +4.1 percent. It had been a little under 4% in July and August of 2021. The last time inflation was estimated at a higher rate was in December 1993 (+4.3%). Consumer prices, according to the Federal Statistical Office (Destatis), remained constant from August 2021.

According to Eurostat, the European Union's statistical office, seasonally adjusted industrial production declined by 1.6 percent in the euro area and 1.5 percent across the EU in August 2021, compared to July 2021. Industrial production increased by 1.4 percent in the euro region and 1.2 percent across the EU in July 2021. Industrial production climbed by 5.1 percent in the euro region and 5.3 percent in the EU in August 2021 compared to August 2020.

Capital goods production declined by 3.9 percent in August 2021 compared to July 2021, durable consumer goods production fell by 3.4 percent, and intermediate goods production fell by 1.5 percent in the euro area.

Weakness in U.S. Dollar Support the EUR/USD

On Wednesday, the US dollar index, which calculates the greenback's strength versus a basket of six major currencies, plummeted to a low of 94.0, owing to concerns about inflation. The benchmark 10-year Treasury yield fell to 1.530 percent, putting additional pressure on the US dollar and driving up yellow metal prices.

On the data front, the Consumer Price Index for September rose to 0.4 percent at 17:30 GMT, beating expectations of 0.3 percent, bolstering the US dollar, which capped additional advances in the yellow metal. The core CPI stayed unchanged at 0.2 percent, as expected.

According to the Federal Reserve's September policy meeting minutes, the central bank could begin tapering its crisis-era economic stimulus in mid-November or mid-December. They were, however, split on how much of a threat high inflation poses and how quickly interest rates should be raised in response.

According to inflation statistics issued on Wednesday, higher prices were not transient, and predictions of interest rate hikes sooner than expected surged amid these anxieties, keeping the yellow metal supported on Wednesday.

EUR/USD Intraday Technical Levels

Support Resistance

1.1538 1.1623

1.1512 1.1668

1.1470 1.1690

Pivot Point: 1.1580

EUR/USD - Technical Outlook

On Thursday, the EUR/USD currency pair was trading at the 1.1592 level and it was gaining immediate support at the 1.1580 level. On the hourly chart, the EUR/USD has violated the upward channel and symmetrical triangle pattern therefore, the pair is on the verge of a bullish trend.

At the moment, the EUR/USD closing Doji and Shoorting start candles on the hourly timeframe that’s supporting indecision among investors. Therefore, the chances of a selling trend or a bearish correction remain strong on Thursday.

The breakout above the 1.1603 resistance level exposes the EUR/USD towards the 1.1625 level, and the continuation of the further upward trendline exposes the pair towards the 1.1649 level. On the downside, the breakout of the 1.1580 support level exposes the EUR/USD towards the next support areas of 1.1512 and 1.1496.

The RSI and MACD are in support of a bullish trend in EUR/USD. Therefore, the bullish bias dominates above the 1.1580 level and vice versa. All the best!