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EUR/USD Starts Recovery, Dollar Trim Gains

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Aayush Jindal

Key Highlights

  • EUR/USD started a decent recovery from the 1.1750 zone.
  • It broke a major bearish trend line at 1.1830 on the 4-hours chart.
  • GBP/USD climbed above 1.3900, but it is still below 1.4000.
  • The Euro Zone Manufacturing PMI is likely to remain stable near 62.6 in July 2021.

EUR/USD Technical Analysis

The Euro formed a base above the 1.1750 level against the US Dollar. As a result, EUR/USD started a decent upward move and it broke the 1.1800 resistance level.

Looking at the 4-hours chart, the pair gained pace above the 1.1800 level and the 100 simple moving average (red, 4-hours). It surpassed a major bearish trend line at 1.1830. The upward move gained pace above the 1.1850 resistance.

The pair even broke the 1.1900 level and the 200 simple moving average (green, 4-hours). A high was formed near 1.1908 before the pair corrected lower.

There was a dip below the 23.6% Fib retracement level of the upward move from the 1.1751 swing low to 1.1908 high. The first major support on the downside is near the 1.1830 level. It is close to the 50% Fib retracement level of the upward move from the 1.1751 swing low to 1.1908 high.

On the upside, the bears are likely to remain active above 1.1900. The next major resistance is near 1.1920, above which the pair might rise towards 1.1980.

Looking at GBP/USD, the pair gained strength above the 1.3900 resistance level. However, it must clear 1.4000 for a larger increase.

Economic Releases

  • Germany’s Manufacturing PMI for July 2021 - Forecast 65.6, versus 65.6 previous.
  • Euro Zone Manufacturing PMI for July 2021 – Forecast 62.6, versus 62.6 previous.
  • UK Manufacturing PMI for July 2021 – Forecast 60.4, versus 60.4 previous.
  • US Manufacturing PMI for July 2021 – Forecast 63.2, versus 63.1 previous.
  • US ISM Manufacturing Index for July 2021 – Forecast 60.8, versus 60.6 previous.
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