August 17, 2021

Blocked At The $ 1.1800 Level, EUR/USD Failed To Continue Last Week's Surge

 The US dollar appreciated earlier this week as market sentiment assessed risk giving an advantage to safe-haven currency trading.

Among the factors that kept investors wary of early-week trading were the slump in Chinese economic data published in the Asian session yesterday, political tensions in Afghanistan as well as the ongoing Covid-19 outbreak.

The situation has saved the US dollar back after a dismal performance last weekend with a significant drop in prices displayed.

If we look at the price movement on the chart of the EUR/USD currency pair, the price that soared last Friday to the level of 1800.00 failed to continue to rise higher past the resistance in Monday's trading yesterday.

The price on the other hand slipped back to the level around 1.17700 and tested the support level of the Moving Average 50 (MA50) on the 1 -hour time frame of the price movement continuing into the Asian session this morning (Tuesday).

If the MA50 support level manages to keep the price from declining lower, the price is likely to resume rising. Yet it requires a factor that weakens the US dollar in the market.

The bulls will test again the resistance of 1800.00 before continuing higher with the next target will be directed towards the resistance zone of 1.19000.

On the other hand, if the price declines lower after yesterday's decline, the price is expected to return to the 1.17000 support zone that was tested last week.

A lower decline beyond the zone will record the latest lows for the year likely heading towards the level of around 1.16000.

Investors are wary of the release of US retail sales data in tonight's New York session that will drive further movement of the US dollar.