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EUR/USD Choppy Session Continues - Brace for a Breakout!

EUR/USD Choppy Session Continues – Brace for a Breakout!

Posted Monday, March 29, 2021 by
Arslan Butt • 3 min read

The EUR/USD pair closed at 1.1796 after placing a high of 1.1805 and a low of 1.1763. After dropping for three consecutive days, EUR/USD rose on Friday but extended its losses and dropped for the second successive week amid the bloc’s rising coronavirus tensions. A third wave of the coronavirus infection was sweeping across much of mainland Europe with E.U. member countries experiencing the deadliest outbreak of the pandemic as the death toll around Italy has been recorded as 106,000, and in France 93,000, Spain 73,000 and Germany as 75,000.

On the other hand, the E.U. has also been on the back foot in the rollout of vaccine campaigns compared to the U.S. and U.K. The recent figures have shown that E.U. countries have administered about 12.9 doses of the vaccine per 100 people as compared to 37.2 in the United States and 44.7 in the United Kingdom. After the E.U. Economic Summit on Friday, the released statement emphasized the importance of global supply chains to produce vaccinations. In the statement, the E.U. leaders stopped banning vaccine exports after a prolonged dispute with the vaccine manufacturer AstraZeneca.

The elements of the vaccine from AstraZeneca are manufactures in many states from the European Union, but the E.U. accused the company of delivering short supplies in the bloc countries while exporting many vaccines to the U.K. and the U.S. The E.U. Commission president Ursula von der Leyen said that AstraZeneca must catch up on deliveries to the E.U. before exporting the vaccine doses elsewhere; otherwise, the E.U. will be forced to ban the vaccine export shipments. This plan was highly criticized by the UK PM Boris Johnson, who urged not to ban the exports as it would imperil the U.K.’s vaccination drive that has been more successful than the vaccination programs in E.U. member countries.However, as a ban on exports could hurt the E.U.’s reputation, the E.U. leaders issued a joint statement with the U.K. after the E.U. Summit in which both sides pledged to work together after weeks of tensions over the Oxford-AstraZeneca vaccine dosses. The smooth end of the prevailing tension between E.U. & U.K. surrounding the vaccine deliveries added strength in the single currency Euro on Friday that eventually added further gains in the EUR/USD pair despite the stronger U.S. dollar on the day.

On the data front, at 14:00 GMT, the German Ifo Business Climate for March rose to 96.6 against the forecasted 93.1 and supported the single currency Euro that added further gains in the pair. At 17:30 GMT, the Core PCE Price Index in February remained flat at 0.1%. The Goods Trade Balance showed a deficit of -86.7B against the forecasted-85.5B and weighed on the U.S. dollar that added further gains in EUR/USD. The Personal Income also plunged to -7.1% against the forecast -7.3% and supported the U.S. dollar that capped further upside in the pair. The Personal Spending declined to -1.0% against the expected -0.8% and weighed on the U.S. dollar and pushed EUR/USD higher. The Prelim Wholesale Inventories fell to 0.5% against the projected 1.2%, supported the U.S. dollar, and limited the  pair’s uptrend. At 19:00 GMT, the Revised UoM Consumer Sentiment for March surged to 84.9 against the projected 83.6, supported the U.S. dollar, and put pressure on rising prices. The Revised UoM Inflation Expectations remained flat at 3.1%.

EUR/USD Choppy Session Continues - Brace for a Breakout!
Daily Technical Levels
Support and Resistance
1.1741 1.1809
1.1718 1.1852
1.1674 1.1876
Pivot Point: 1.1785The EUR/USD pair fell sharply to trade at 1.1770 level over stronger U.S. dollar. On the higher side, it may now face resistance at 1.1803 and 1.1826 level. At the same time, the support continues to hold around 1.1760 level. Considering the EMA, RSI, and MACD, the pair may continue to exhibit selling bias until the 1.1760 level. Good luck!
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