EUR/USD Analysis – September 08, 2021

Upward Trendline Breakout at 1.1850

After hitting a top of $1.1885 and a low of $1.1837, the EUR/USD pair was settled at $1.1839. The EUR/USD pair fell for the second day in a row on Tuesday as the US dollar regained momentum.

The United States did not release any macroeconomic data on Tuesday, leaving the dollar to continue the market trend. On the benchmark 10-year note, the yield rose sharply to 1.38 percent, its highest level since mid-July, helping the greenback find demand. The US Dollar Index increased by around 0.5 percent to 92.5, putting more pressure on the EUR/USD currency pair.

The single currency was under pressure on the European side due to lower-than-expected ZEW Economic Sentiment from the Eurozone and Germany, which highlighted the Eurozone's dismal economic health and weighed on the Euro. However, during the second quarter, the bloc's GDP showed a significant increase, which the single currency could not benefit from due to high negative pressure.

In July, the German Industrial Production stayed unchanged at 11:00 GMT, despite a 1.0 percent increase predictions. The ZEW Economic Sentiment Index for September fell to 31.1 from 35.3 expected at 14:00 GMT, weighing on the single currency Euro and adding to the EUR/USD decline. The German ZEW Economic Sentiment Index fell in September, reaching 26.5 versus a projection of 30.2.

The Final Employment Change for the quarter jumped to 0.7 percent, beating expectations of 0.5 percent, and bolstered the Euro, preventing additional losses in the EUR/USD. The quarter's revised GDP increased to 2.2 percent, up from 2.0 percent expected, bolstering the Euro and limiting the decline in EUR/USD prices.

The market's attention has switched to the European Central Bank's upcoming monetary policy meeting, planned for Thursday this week. Investors expect the ECB to report slower PEPP purchases in Q4 due to strengthening economic circumstances in the EU. On the other hand, investors were wary of placing big bids in the riskier currency combination EUR/USD ahead of the meeting, putting the pair under pressure for the rest of the week.

EUR/USD Intraday Technical Levels

Support Resistance

1.1823 1.1871

1.1805 1.1903

1.1774 1.1920

Pivot Point: 1.1854

EUR/USD - Technical Outlook

The EUR/USD is trading bearish, holding below a pivot point level of 1.1841. On the hourly timeframe, the pivot point is working as a resistance for the EUR/USD price at the 1.1854 level. Below this, the EUR/USD is exhibiting a bearish bias and is gaining immediate support at the 1.1836 level. A breakout below the 1.1836 level exposes the EUR/USD pair towards the next support areas of 1.1820 and 1.1804. Furthermore, the breakout of the 1.1804 level exposes the pair towards the next support area of the 1.1775 level.

On the other hand, the breakout of a resistance level of 1.1852 exposes the EUR/USD towards 1.1868 and 1.1885 levels. On the 4-hour timeframe, the pair has violated an upward trendline resistance at 1.1840. Thus, the bearish bias dominates below 1.1850 and vice versa.

All the best.