Unfortunately Euro versus US dollar has hit our stop loss to previously published analysis/signal due to gaining bullish momentum on King Dollars weakness the entire week and specifically on Friday closing. According to fundamentals, tapering is soon to be expected from the Fed during Q4, Its highly likely that the ECB commits to keeping the pace of PEPP purchases “significantly higher” than earlier in the year. That will ensure quite a notable divergence in Fed/ECB policy into year-end. Beyond the 1.1805 level, the next resistance is 1.1890, the 38.2% retracement of the mentioned monthly decline. Sellers will likely add on approaches to it.  However, the focus was on Chair Jerome Powell, who spoke within the Jackson Hole Symposium.  The EUR/USD pair jumped to fresh weekly highs after Powell said that it could be appropriate to start taper this year as he delivered his prepared remarks. His hawkish tone was a surprise for market participants, who had anticipated a cautious wording.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

EURUSD has taken a bullish exit from our bearish channel followed by a bearish retest of major resistance turned support 1.17110 and continued higher with a strong bullish closing above exponential moving average 200 in four hourly time frame. Observing the sharp bullish reversal from ichimoku cloud in four hourly chart, yet staying below exponential moving average 50 in daily along with Senkou Span B of the ichimoku cloud. The aforementioned are strong barriers in EURUSD going higher but we are still anticipating bullish momentum that can lead the pair towards 1.18472 and 1.19019 i.e exponential moving average 200 in daily. More we get to witness EURUSD turning major resistances into supports, only bearish retests should be expected with the pair marking its way towards 1.2000. Also keeping in mind a dovish impulsive breakout below 1.1710 would go for the yearly low at 1.1663 as the immediate support level, followed by 1.1540. A break below the latter will open the door for a test of 1.1470, a long-term static support level.

EURUSD

Aug 28 2021

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