August 20, 2021

Investors Expect EUR/USD To Fall Lower, $ 1.1600 Level Be The Target?

 Although the minutes of the Federal Reserve (Fed) meeting did not reveal any timeline for implementing the reduction in bond purchases (tapering), investors still saw the propensity for such action following recommendations by some Fed members.

The US dollar on Thursday performed well as it continued to strengthen to a 9 -month high which was also driven by risky market sentiment.

In yesterday's New York session as well, the United States (US) unemployment benefit claims data for last week also recorded a lower decline than expected to give a positive signal for the labor sector.

The US dollar managed to put pressure on most major currencies in the market towards the end of the week but was slightly different for the Euro.

On the EUR/USD chart, the price has already shown a decline to the latest lows for the year after falling lower below the 1.17000 level which was the previous price support zone.

After reaching the level around 1.16650, the price rose again to retest the level of 1.17000 which is the latest resistance of the price.

After the level failed to be passed and the price also failed to pass the Moving Average barrier (MA50) on the 1 hour time frame, the price declined again to signal a bearish movement.

The price movement at the end of the New York session started to slow continuing at the beginning of the Asian session on Friday morning around the 1.16800 level.

If the price that is still testing the SBR (support become resistance) zone of 1.17000 fails to continue higher, the price is expected to make a decline to the level of 1.16000.

The 1.16000 level is a price support zone in September and October 2020 trading that will be given attention by investors.

Yet if the upside manages to resume above the 1.17000 zone, an indication for a bullish signal will push expectations for the price to head back to the 1.18000 resistance zone.