EUR / USD without a clear direction does not hold above 1.1600

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  • The US dollar strengthens during the US session as stocks fall, despite falling yields.
  • EUR / USD finds resistance at the 20-day simple moving average.

The pair EUR/USD it is moving sideways on Tuesday, unable to stay above 1.1600. Recently, it touched a fresh three-day high at 1.1608, but quickly retreated towards daily lows. It sits below 1.1580 with a clear direction.

The dollar gained momentum during the US session across the board, even as US yields held near recent lows. The DXY is up 0.05%, ending a two-day negative streak.

Economic data from the US showed that the PPI increased mainly in line with expectations, without having a significant impact on the markets. On Wednesday the CPI data will be published. Those numbers will be important in considering the Federal Reserve’s next steps. In addition, market participants await President Biden’s decision regarding the Fed chairman. Brainard (a mild-mannered) was mentioned in the trade media as a possible replacement for Powell.

EUR / USD upside is capped by strong area

The rally from annual lows found resistance around 1.1600 / 10, the area that contains the 20-day moving average. Modestly above 1.1620 there is another relevant horizontal resistance. A daily close above 1.1620 would open the doors for more gains.

While below 1.1600, the rise appears limited. Support levels can be located at 1.1565 and 1.1545. If the price is below 1.1550, the critical support at 1.1520 will be challenged.

Technical levels

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