Key Highlights
- EUR/USD extended its decline below the 1.1850 support zone.
- A key bearish trend line is forming with resistance near 1.1900 on the 4-hours chart.
- The US nonfarm payrolls increased 850K in June 2021, up from 583K.
- The Euro Zone Services PMI is likely to remain stable near 58 in for June 2021.
EUR/USD Technical Analysis
The Euro remained in a bearish zone below the 1.1900 pivot level against the US Dollar. EUR/USD even traded below 1.1850 to move further into a bearish zone.
Looking at the 4-hours chart, the pair settled well below the 1.1900 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
The pair traded as low as 1.1807 and it is now correcting losses. There was a break above the 23.6% Fib retracement level of the recent decline from the 1.1975 high to 1.1807 low.
On the upside, there is a major barrier near the 1.1900 level. There is also a key bearish trend line forming with resistance near 1.1900 on the same chart. A clear break above the trend line could push the price towards the 1.1950 level.
Any more gains could lead the price towards the 1.1980 zone and the 100 simple moving average (red, 4-hours). On the downside, there is a key support forming near 1.1800. The next major support is near the 1.1780 level, below which the pair could dive towards 1.1720.
Fundamentally, the US nonfarm payrolls report for June 2021 was released this past Friday by the US Bureau of Labor Statistics. The market was looking for an increase from 559K to 583K.
The actual result was better than the forecast, the US nonfarm payrolls increased to 850K. Moreover, the last reading was revised from 559K to 583K.
The report added:
Both the unemployment rate, at 5.9 percent, and the number of unemployed persons, at 9.5 million, were little changed in June. These measures are down considerably from their recent highs in April 2020 but remain well above their levels prior to the coronavirus (COVID-19) pandemic.
Overall, EUR/USD could remain bearish as long as it is below 1.1950. Similarly, GBP/USD is likely to struggle to clear the 1.3900 and 1.3920 resistance levels.
Economic Releases
Germany’s Services PMI for June 2021 – Forecast 58.1, versus 58.1 previous.
Euro Zone Services PMI for June 2021 – Forecast 58.0, versus 58.0 previous.
UK Services PMI for June 2021 – Forecast 61.7, versus 61.7 previous.
