EUR/USD outlook: Euro falls to new 2021 low, risks deeper correction

Slobodan Drvenica Windsor Brokers

EUR/USD

The Euro holds firmly in red for the fourth straight day and hit new 2021 low (1.1665) on probe through key supports at 1.1704/1.1694 (former annual low of Aug 11/Fibo 38.2% of 1.0635/1.2349 rally).

Fresh risk aversion on fears that rising number of new Covid cases could slow global economic recovery and threats of escalation of crisis in Afghanistan, keep the single currency under increased pressure.

Stronger dollar on risk aversion and Fed’s signals of potential start of tapering, although the central bankers are still lacking agreement over key points – labor and inflation – adds to Euro’s negative sentiment.

Clear break of pivotal 1.1700 support zone would further weaken the structure and risk fresh acceleration towards the higher base at 1.1630/00 and more significant 1.1500 zone (weekly cloud base/50% of 1.0635/1.2349 ascend.

Bearish daily techs support the notion with corrective upticks on oversold conditions, expected to fade under pivotal barriers at 1.1800 zone (Aug 13 lower top / falling 10DMA) and offer better selling opportunities..

Res: 1.1715; 1.1737; 1.1787; 1.1804.
Sup: 1.1665; 1.1630; 1.1600; 1.1500.

Interested in EUR/USD technicals? Check out the key levels

1. R3 1.1787
2. R2 1.1765
3. R1 1.1738
PP 1.1716
1. S1 1.1689
2. S2 1.1667
3. S3 1.164

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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