EUR/USD Targets Fresh Lows, Dollar Recovers

Technical analysis of Forex market

Key Highlights

  • EUR/USD failed to surpass 1.1900 and declined heavily.
  • It broke a major bullish trend line at 1.1800 on the 4-hours chart.
  • GBP/USD also declined below the 1.3900 support zone.
  • The US nonfarm payrolls increased 943K in July 2021, up from the last 938K (revised from 850K).

EUR/USD Technical Analysis

The Euro started a major decline after it failed to surpass 1.1900 against the US Dollar. EUR/USD traded below the key 1.1850 support to move into a bearish zone.

Looking at the 4-hours chart, the pair traded below the 1.1820 support zone. There was also a break below a major bullish trend line at 1.1800. The pair settled below the 1.1800 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

Finally, the pair traded below the 1.1755 support zone. A low is formed near 1.1742 and the pair is now consolidating losses.

If there is a downside break below 1.1740, the pair could accelerate lower towards 1.1700. The next major support on the downside is near the 1.1650 level.

On the upside, the first major resistance is near the 1.1800 level. The main resistance is now forming near the 1.1820 level and the 100 simple moving average (red, 4-hours). It is also near the 50% Fib retracement level of the recent decline from the 1.1899 swing high to 1.1742 low.

Looking at GBP/USD, the pair failed to surpass the 1.4000 resistance and it started a fresh decline below 1.3900. Besides, USD/JPY gained pace above the 110.00 resistance zone.

Economic Releases

  • Germany’s Trade Balance for June 2021 – Forecast €13.5B, versus €12.6B previous.
  • Euro Zone Sentix Investor Confidence for August 2021 – Forecast 29, versus 29.8 previous.