August 25, 2021

After 2 Consecutive Days Of Rise, Will EUR/USD Fall Again?

 The US dollar has displayed a weak movement for 2 consecutive days earlier in the week as investors remain vigilant ahead of the Jackson Hole symposium which will take place starting this Friday.

In the event, investors will see if Federal Reserve (Fed) Chairman Jerome Powell will provide clues for when the bond purchase reduction measure (tapering) will be implemented.

Expectations for the tapering move to be carried out are fading as concerns over the spread of the Delta variant Covid-19 are growing and the economy still needs support by the government and central banks.

Thus, the US dollar was still seen moving lower yesterday although the decline displayed did not match the decline that occurred on Monday.

On the price chart of the EUR/USD pair, the price that soared above the 1.17000 level at the beginning of the week continued yesterday’s rise testing the level around 1.17600.

The price is still moving above the support level of Moving Average 50 (MA50) on the 1 hour time frame indicating the movement of the bullish trend.

The decline in the Asian session this morning (Wednesday) is seen to test the MA50 level to signal the direction of further price movement.

If the price manages to continue rising for the third day, the resistance of 1.18000 will be the focus after the previous week the price failed to pass that level.

A price increase that manages to break the 1.18000 level will push a potential higher rise to reach the 1.19000 high.

However, if the price declines lower, the 1.17000 level will return to the focus again to be tested. A lower decline will signal a reversal of the bearish trend.

For a lower decline, last week's support level around 1.16700 will be tested before a continued decline is expected to head to the 1.16000 level thus recording the latest low this year.