EUR/USD Analysis – September 17, 2021

Major Resistance at 1.1780

After hitting a top of $1.1822 and a low of $1.1751, the EUR/USD pair was closed at $1.1764. The EUR/USD pair fell to its lowest level since August 27 on Thursday, owing to further US dollar strength. Following the announcement of robust Retail Sales data on Thursday, the US Dollar gained ground versus its rival currencies, paving the way for anticipation of tapering signals at the upcoming Fed policy meeting next week. The US Dollar Index hit 92.96, its highest level in three weeks, while the US Treasury Yield hit 1.35 percent, pushing the greenback higher and dragging the EUR/USD currency pair lower.

On the data front, the Italian Trade Balance in July jumped to 8.76 billion euros against a projection of 6.22 billion euros, supporting the single currency Euro and capping any losses in EUR/USD at 13:03 GMT. At 14:00 GMT, the Trade Balance for the entire EU fell to 13.4 billion euros in July, down from 16.8 billion euros expected, weighing on the Euro and adding to the slide in EUR/USD values.

At 17:30 GMT, the US Core Retail Sales grew to 1.8 percent in August, beating expectations of -0.1 percent, bolstering the US currency and adding to the EUR/USD loss. Retail Sales increased by 0.7 percent in August, compared to a forecast of -0.7 percent, bolstering the US dollar, which lowered the EUR/USD pair. The Philadelphia Fed Manufacturing Index increased to 30.7 in September, up from 18.9 in August, bolstering the US dollar, which pressured the EUR/USD pair. Last week's Unemployment Claims increased to 332K from 325K predicted, weighing on the US currency and limiting the fall in EUR/USD. Business Inventories remained unchanged at 19:00 GMT, with an estimate of 0.5 percent.

Meanwhile, Christine Lagarde, the president of the European Central Bank, stated on Thursday that the eurozone economy is rebounding faster than expected just six months ago. She credited the speedy rebound to a vaccination campaign that allowed vast areas of the economy to reopen quickly. Lagarde also stated that the combined GDP of the 19 Eurozone countries should return to pre-crisis levels by the end of the year, even though the growth trend has yet to recover fully. These statements from Lagarde were positive for the Euro, but they didn't help it because the market's attention was diverted to the next Fed policy meeting.

EUR/USD Intraday Technical Levels

Support Resistance

1.1736 1.1807

1.1708 1.1850

1.1666 1.1878

Pivot Point: 1.1779

EUR/USD - Technical Outlook

On Friday, the EUR/USD currency pair is trading with a bearish bias at the 1.1775 level; however, the pair has bounced off over the support level of 1.1750 level. Closing of candles below 1.1779 exposes the pair towards 1.1750 and 1.1709 support levels.

On the resistance side, the downward trendline provides major resistance at the 1.1819 level, and a bullish crossover of this exposes the pair towards 1.1849 and 1.1878 levels. On the 4-hour timeframe, it's closing bullish engulfing and Doji candles above 1.1750 level, supporting correction in the EUR/USD. Moreover, the RSI and Stochastic have started coming out of the oversold zone. Thus, the EUR/USD's bearish bias dominates below 1.1780 and vice versa. All the best!