EUR/USD Violates Intraday Support $1.1754 – Bearish Bias Dominates!
The EUR/USD pair closed at 1.17608 after placing a high of 1.17864 and a low of 1.17488. After placing gains for two consecutive sessions, the EUR/USD pair dropped on Friday amid the strong US dollar and the rising number of coronavirus cases in Europe. The US dollar advanced with upbeat US employment data on Friday and weighed heavily on the currency pair. In March, the US economy added a massive number of jobs and strengthened the hopes for economic recovery that triggered risk-on market sentiment amid the rising optimism.
Most of the financial markets in America, Europe, and elsewhere were closed due to Good Friday, which reduced the trade volume that limited the surge in the US dollar. Otherwise, more bearish momentum could have been seen in EUR/USD on Friday. Meanwhile, the US Treasury yields also rose on Friday to a 1.73% level but remained below the week’s highest level of 1.77%.
On the data front, at 17:30 GMT, Average Hourly Earnings from the US for March dropped to -0.1% against the estimated 0.1% and weighed on the US dollar that capped further downside in EUR/USD. In March, the Non-Farm Employment Change surged to 916K against the anticipated 652K and supported the US dollar that added further losses. The Unemployment Rate from the US remained flat with the expectations of 6.0%. On the other hand, the European countries were facing havoc due to the third wave of coronavirus that was causing the infection rates to soar. The Eastern and Central Europe that largely escaped the worst of the coronavirus pandemic in 2020 faced a dramatically changed situation with various countries experiencing record deaths and infections.
The largest economy in the Eurozone, Germany, also faced a rise in the number of infections by 24,300 on Thursday that pushed the total number of confirmed cases to 2.83M, which was the biggest increase since January 14th. It is expected that the rising number of cases at this pace will soon lead the country to a national lockdown. The government of France also announced a third national lockdown that will close all the schools.
The current situation in Europe is likely to deteriorate further before improving, particularly because of the sluggish vaccine rollout, and Germany and other EU members continue to impose restrictions on the use of vaccines from AstraZeneca. All these negative developments in Europe added pressure on the single currency Euro that added in the EUR/USD pair’s losses on Friday.
Furthermore, the losses in EUR/USD could also be attributed to the optimism in the market after the US dollar’s strength. The US economic outlook improved after the US Centers for Disease Control and Prevention said on Saturday that more than 4M doses of coronavirus vaccine were being administered in the past 24 hours. This raised the seven-day average to 3M doses per day and gave strength to the US dollar that added further to the EUR/USD pair’s downside momentum.
Daily Technical Levels
Support Resistance
1.1760 1.1773
1.1751 1.1777
1.1747 1.1786
Pivot Point: 1.1764
The EUR/USD pair is trading with a bearish bias at 1.1760 level, having crossed below the 50 periods EMA support area of 1.1765 level. Closing of candles below 1.1765 level can drive selling trend until 1.1745 and 1.1713 level. On the higher side, EUR/USD is likely to face resistance at 1.1771. The RSI and MACD indicators are suggesting selling bias today. Good luck!
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