The Euro/Dollar exchange rate is continuing to fall. If the EUR/USD falls below 1.1420, according to experts at TD Securities, the globe’s most prominent currency duo will fall towards 1.13. The EUR/USD is making a course adjustment to the downside.
The experts at TD Securities have stated that the momentum signals for the EUR/USD continue to point to a gradual decline in the currency pair. They also stated that 1.1420 is the next support level, but this does not appear to be a significant support level. Below this, there’s not much in the way of stability until the price of 1.13 is reached.
Technical Breakdown
EUR/USD CHART Source: Tradingview.com
Since the strong loss yesterday, the Relative Strength Index (RSI) signal on the four-hour chart has maintained a reading below 30. On the other hand, there are no dissimilarities between the value and the RSI. If the RSI begins to achieve larger lows while the duo continues to fall, buyers may become more hopeful about a rebound. Profit-taking and end-of-week flows could further aid the pair in its upward trajectory.
Technical obstacles are likely to derail any recovery efforts that do not receive additional impetus from fundamental changes in the economy. On the negative side, the level of 1.1430 (the stationary level) serves as early support in front of the level of 1.1400 (psychological level). EUR/USD could experience further losses if it falls under the latter and begins to use that level as support. This could result in further losses toward 1.1370 (prior resistance, static level).
Initial support is found around 1.1500 (psychological level), followed by 1.1520/30 (20-period SMA, stationary level) and 1.1550 (secondary resistance) (50-period SMA).
Review Of The Day’s Basics
Although the relatively close chart patterns continue to suggest oversold circumstances, the EUR/USD plummeted to its lowest point since January 2020 at 1.1436 in early Asian trading on Friday. In the absence of significant macroeconomic data announcements, a positive shift in market sentiment could aid EUR/USD is staging a weekend rally. However, the underlying picture continues to favor the Greenback over the shared currency, particularly after the scorching US inflation data indicated to the US Federal Reserve tightening policy sooner than expected.
The European Central Bank (ECB) admitted in its monthly Economic Bulletin that inflation is persisting longer than expected, but underlined that the majority of price pressures are considered to be transient. Nevertheless, the European Commission boosted its Eurozone GDP growth prediction for 2021 to 5% from 4.3% earlier and forecasts annual inflation of 2.4% in 2021.
These releases failed to offer a clear indication that the ECB’s tone on interest rates might change, making it harder for the common currency to find interest. Later in the session, the Eurozone’s September industrial production statistics will be scrutinized for new momentum. The University of Michigan will issue its interim Consumer Sentiment Index for November ahead of the weekend, and investors will be looking for new signs about the impact of inflation on US market activity.
