Wednesday’s trading session saw the EUR/USD lose even more ground and reach new YTD declines in the 1.1530/25 zone. If the selloff continues to build, the next significant support is projected to appear in the area of 1.1500, which is where the March 2020 peak is located (1.1495). For now, the near-term forecast for the EUR/USD is considered on the downside, with the pair currently trading below the important 200-day simple moving average (SMA), which is currently at 1.1953.
Outline of the Technical Aspects
EUR/USD CHART. Source: Tradingview.com
The EUR/USD duo is likely to continue its decline, with market players focusing their attention on the 1.1470 trading zone, which serves as a significant link support zone. Although a breach below the threshold on the first try is highly improbable, it is not impossible. When looking at things from a technical standpoint, the risk is weighted to the downside.
The daily chart reveals that chart patterns have maintained their negative slopes inside oversold levels as the duo has continued to fall under solidly bearish moving averages over the past several weeks. The short-term picture also favors another leg down, as the duo has increased its decline after breaching below its 20-day simple moving average (SMA). In the meantime, technical indications are hovering near oversold levels, with little strength in the direction of the downside. Support levels are as follows: 1.1520, 1.1475, and 1.1440. Resistance levels: 1.1590 1.1640 1.1685 1.1690 1.1590 1.1685
Review of the Basics
During the European period, the EUR/USD duo dropped to a new 2021 low of 1.1528, where it remained until the start of the New York trading day on Wall Street. In a risk-averse environment, the Greenback trades in a turbulent manner, generating advances against its high-yielding counterparts while falling versus safe-haven assets. Constantly rising inflation and distribution network interruptions are among the main sources of concern.
Conversely, the yield on US government bonds is rising, supported by a stronger-than-expected ADP report in the United States. According to the statement, the private market added 568K new jobs in September, exceeding estimates and doing so notwithstanding the outbreak of the Delta strain throughout the nation. The return on the benchmark 10-year Treasury note reached a high of 1.573 percent at one point, but it is now hovering around 1.53 percent.
Europe’s economic data, which was issued previously in the day and fell short of expectations, put further pressure on the common currency. Factory orders in Germany fell 7.7 percent in August, far more than the 2.1 percent predicted by economists. Furthermore, retail sales in the EU increased by 0.3 percent month on month, falling short of the predicted 0.8 percent increase.