September 28, 2021

The $ 1.17000 Zone Remains Dam of the Fall of EUR/USD

 The 10 -year surge in US treasury yields that reached its highest level since July of around 1.5% indirectly continued to support the USD to continue to strengthen towards the end of September.

This follows the hawkish statement hurled by the Federal Reserve (Fed) last week which has slightly affected the greenback dollar to remain fashionable against most major currencies despite starting trading earlier this week weakly.

The Fed has signaled to begin measures to reduce stimulus as soon as possible in November.

In addition, there are also factors where there is a possibility that the interest rate increase will be implemented sooner than expected.

Being the focus of the market tonight is a speech to be delivered by Fed Chairman Jerome Powell which in turn will be a hot spotlight that could likely support the strengthening of the USD.

Examining the price chart of the EUR/USD pair, the price has shown a plunge at the beginning of the European session yesterday to remain testing the 1.17000 support zone.

But the price still failed to break the support zone of 1.17000 and was seen moving horizontally when entering the New York session yesterday.

Meanwhile, the Euro currency is still unable to show encouraging action after receiving a less than satisfactory injection on the publication of European economic data.

If the 1.1700 support zone is successfully broken, the next move is expected to re -test the lowest level ever reached at the end of August around 1.16700.

Next, the support zone at 1.16000 will be the price focus level to be tested again if the decline continues and thus will record the latest lows for the year.

However, if the USD trades weak again, the SBR (support become resistance) zone around 1.17500 will be the next resistance level to be tested.

A higher rise is expected to lead to the resistance level of 1.18000 and it is likely that the price will signal for EUR/USD to return with a bullish trend.