EUR/USD Analysis – September 30, 2021

Eyes on U.S. Final GDP Data

The EUR/USD pair was closed at $1.1595 after placing a high of $1.1691 and a low of $1.1589. EUR/USD continued its bearish streak for the 4th consecutive session on Wednesday and reached its lowest since mid of July 2020 amid the strength of the U.S. dollar. The U.S. dollar was high on board during Wednesday's trading session and reached its one-year highest level at 94.43, which added a loss in the currency pair EUR/USD. The U.S. dollar was moving higher on expectations that Fed would soon start increasing interest rates and reducing asset purchases.

On the data front, at 11:00 GMT, German import prices rose to 1.4% in August versus the forecasted 0.8%, bolstering the single currency Euro, which capitulated further losses in the EUR/USD pair. At 12:00 GMT, the Spanish Flash CPI for the year advanced to 4.0% against an estimated 3.5% and supported the Euro, which reduced the pace of decline in EUR/USD. At 19:00 GMT, pending home sales in August increased to 8.1%, versus the expected 1.1%, supporting the U.S. dollar and adding to the EUR/USD loss.

The currency pair EUR/USD fell to its 14-month lowest on Wednesday as the prevailing risk-off mood supported the safe-haven greenback. Furthermore, the Euro was under pressure due to Europe's energy crisis and the European Central Bank's dovish stance.

The natural gas inventories at European storage facilities are at historically low levels at this time of the year. The flow of pipelines from Russia and Norway has also been limited.

Reduced output from wind turbines amid the calmer weather has also raised fears that the European energy crisis will toll the European economy when the cold weather comes, as then the energy demand will increase. In Europe, gas prices have already surged by almost 500% in the past year, and it is predicted that they will continue to rise in coming winters.

Furthermore, the continent's energy shortage has raised alarms for the rest of the world as governments have warned of blackouts and factories are being forced to shut down. These negative developments kept the single currency Euro under pressure and added to the loss of the EUR/USD pair on Wednesday.

EUR/USD Intraday Technical Levels

Support Resistance

1.1559 1.1661

1.1523 1.1727

1.1457 1.1763

Pivot Point: 1.1625

EUR/USD - Technical Outlook**

The EUR/USD currency pair is trading with a bearish bias at 1.1597 level as the Euro has violated a strong support level of 1.1665. A closing of candles below this level suggests a strong selling bias in the currency pair. On the lower side, the bears may find support at the 1.1589 level, whereas the violation of 1.1589 exposes towards 1.1560 and 1.1524 levels. On the bullish side, the immediate resistance stays at the 1.1625 level, and a breakout about this level can expose EUR/USD towards the 1.1661 level.

On the hourly timeframe, the EUR/UD pair has formed Doji candles above the 1.1589 level, which has driven a bullish bounce-off in the pair. On the bullish side, the EUR/USD’s immediate resistance stays at 1.1625 level, extended by a pivot point level. Alongside, the breakout of the 1.1625 level exposes the pair towards 1.1661 and 1.1690 levels. Later today, the investors will be waiting for U.S. GDP figures to determine further trends in the market. All the best!

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