The EUR/USD pair trades marginally lower on a daily basis as the greenback becomes more attractive heading into the US opening. However, the pair is roughly 30 pips below the Asian peak at 1.1606. The dollar found favor ahead of the release of the US Producer Price Index, which held steady at 8.6% YoY in October. The core reading came in at 6.8%, also matching its previous reading.

Earlier in the day, Germany published the November ZEW Survey, with the country’s Economic Sentiment unexpectedly improving to 31.7 from 22.3. The EU indicator also improved, from 21 to 25.9, although the assessment of the current situation in Germany plunged to 12.5 from 21.6. Meanwhile, European policymakers diverge on their vision about a rate hike.  Klaas Knot said that conditions for a rate hike are very unlikely to be met in 2022, while top supervisor  Andrea Enria said low ECB interest rates are now hurting bank margins more than they are boosting lending volumes.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

The EUR/USD pair seems poised to resume its decline. The daily chart shows that the advance was rejected by sellers aligned around a directionless 20 SMA, which remains below bearish longer ones. Technical indicators remain within negative levels, the Momentum gaining bearish traction and the RSI steady at around 45.

The 4-hour chart shows that the pair retreated from near its 100 and 200 SMAs, both converging around 1.1610, as the 20 SMA maintains a bearish slope below the current level, hinting at persistent selling interest. Technical indicators have turned lower within positive levels, approaching their midlines. The pair has room to retest its year low and even extend its slump, mainly if it accelerates its decline below 1.1550, the immediate support level.

Euro taking advantage of Dollars weakness

Nov 09 2021