Upward Channel Breakout
The EUR/USD pair ended the day at $1.1606 after reaching a high of $1.1666 and a low of $1.1590.EUR/USD fell on Monday and extended its losses due to the US dollar's resurgence, risk-off market sentiment, and mixed macroeconomic data from Europe. The US Dollar Index, which measures the greenback's value against the basket of six major currencies, rose and reached a 93.84 level that ultimately supported the US dollar and weighed on the currency pair EUR/USD. On the other hand, the single currency euro was weak on Monday as the German growth outlook for October dropped, which ultimately added to the declining prices of the EUR/USD currency pair.
On the data front, at 13:00 GMT, the German IFO Business Climate for October dropped to 97.7 from the forecasted 98.2 and weighed on the single currency euro. That added to a further decline in the EUR/USD pair. At 18:00 GMT, the Belgian NBB Business Climate increased to 4.0 from 2.3 expected, bolstering the single currency Euro and capitulating further losses in the EUR/USD pair. Furthermore, the investors were also cautious before the upcoming European Central Bank meeting scheduled on Thursday. Investors will keep a close eye on the comments coming from ECB officials as they could give hints about the next moves by the bank. Traders will look forward to the comments to find out whether inflationary pressures impact interest rates.
Moreover, the European currency was also weak across the board amid rising coronavirus infections in the region. The coronavirus infections recorded so far in eastern Europe surpassed 20 million on Sunday as the outbreak reached its worst level since the pandemic started. Because of the lowest vaccination rates in the countries belonging to that region in Europe, less than half of the population have received a single dose there.
The average daily infection rate has been recorded there as 83,700, which is the highest level since last November. These negative developments in Europe added weight to the single currency that ultimately dragged the currency pair EUR/USD further to the downside.
EUR/USD Intraday Technical Levels
Pivot Point: 1.1621
EUR/USD - Technical Outlook
The EUR/USD is trading with a strong bearish bias at 1.1604 level, having violated the upward trendline at 1.1631 level. The closing of candles below 1.1620 suggests a selling bias among investors. On the bearish side, the EUR/USD’s immediate support prevails at the 1.1590 level.
Furthermore, an additional breakout of 1.1590 support could expose the pair towards the 1.1576 level. Moreover, the breakout of 1.1576 exposes the pair towards 1.1546.
On the higher side, the EUR/USD’s immediate resistance stays at the 1.1620 level as that’s been extended by a pivot point resistance level. Above this, the EUR/USD will be exposed to the next resistance areas of 1.1650 and 1.1665 levels. The RSI and Stochastic are supporting a selling bias on Tuesday. All the best!
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