EURUSD Reached 1.1710 Key Support Level – Can Buyers Reverse the Momentum?

EURUSD Reached 1.1710 Key Support Level – Can Buyers Reverse the Momentum?

 Published: August 12th, 2021

The broader US Dollar strength has made a strong position of USD bulls against other currencies, and there is no exception for the EURUSD. Since the hawkish tone by Fed in June, EURUSD started moving lower that was influenced by the recent US Non-Farm Payroll and GDP. On the other hand, the ECB failed to impress investors by providing any significant change in the economic policy.

However, the first attention to EURUSD bulls came with the US core CPI at 0.3%, lower than the expectation of 0.4%. This is because the broader strength in the US economy made investors worry about the possible inflation. Therefore, now the weaker than expected core inflation may relieve them for a shorter period. However, the headline inflation was in line at 0.5%, and further indication may come after the PPI release today.

Let’s see the upcoming price direction from the EURUSD technical analysis:

EURUSD Daily Chart

EURUSD Daily Technical Analysis 12 August 2021

EURUSD became volatile after the June FOMC move that made the price remain indecisive between 1.1900 to 1.1750 area. Moreover, the price showed bullish signs above the dynamic 20 EMA and static 1.1831 support level but failed to hold the movement with multiple indecision candles. As bulls could not hold the price, bears appeared and made a new low below the 1.1750 level and reached the 1.1710 key support level. As the price showed a bullish daily close from the 1.1710 key support level, it is more likely to move up in the coming days.

The above image shows that the price made a bullish daily close from the 1.1710 support level, influenced by the US CPI release. Moreover, the bullish pressure is backed by a regular divergence with MACD and mean reversion with dynamic 20 EMA.

Based on this contest, EURUSD has a higher possibility of moving up where a bullish daily close above the 1.1750 level may boost the buying pressure. Otherwise, a daily close below 1.1700 level may open a new room for EURUSD sellers.

EURUSD H4 Chart

EURUSD H4 Technical Analysis 12 August 2021

Based on the Ichimoku Kinko Hyo, the scenario is different in the EURUSD H4 chart. The price moved up above the Kumo Cloud but failed to hold the momentum and moved down again. The future cloud is still bearish and Chikou Span is below the price.

The above image shows that the price moved up from the static 1.1710 support and dynamic Tenkan Sen with an H4 solid close. The RSI also rebounded from the oversold level with a possibility of moving higher.

In this context, a strong bearish H4 close below the 1.1710 level may resume the current bearish pressure towards the 1.1600 level. Conversely, an H4 close above the 1.1754 intraday event level may increase the bullish possibility towards the 1.1831 level.

EURUSD H1 Chart

EURUSD H1 Technical Analysis 12 August 2021

In the intraday chart, EURUSD bears are active as the price is trading below the 1.1754 intraday event level. Moreover, the price was rejected and moved below the most recent intraday high volume level and dynamic 20 EMA. Therefore, buyers should wait for a stable price above 1.1754 before opening a buying position.

In the above image, we can see that the EURUSD price moved below the dynamic 20 EMA and vwap with a bearish H1 close. Moreover, the price moved below the most recent high volume level of 1.1738. Moreover, the MACD Histogram is bearish and moving down. In that case, the price has a higher possibility of moving down as long as the price is trading below the 1.1754 level.

On the other hand, a strong breakthrough above the 1.1754 level with a bullish H1 close may take the price higher towards the 1.1831 level in the coming session.

Should You Try Selling EURUSD?

As of the above observation, traders should find a strong buying pressure above the 1.1754 level to consider the current sentiment is bullish. Moreover, a stable bullish H4 close above the 1.1800 level would increase the buying possibility.

On the other hand, the intraday price is still bearish and trading below the dynamic 20 EMA and vwap level. Therefore, any new bearish H1 close below the 1.1710 level may eliminate the current buying possibility and take the price lower towards 1.1650 area.

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