- EUR/USD keeps pressuring a critical support area on Friday.
- US dollar mixed on Friday and over the week ahead of the FOMC meeting.
The EUR/USD remains unable to make a sustained recovery and it keeps pressuring the 1.1750 area. After reaching 1.1780, the pair dropped back to the daily low at 1.1752. The euro is about to end the week under pressure and looking vulnerable, but so far still above a critical short-term support.
So far it has been a quiet Friday for EUR/USD, not affected neither by US data nor comments and rumors about the European Central Bank. PMIs in Europe came in above expectations and mixed in the US, but price action remained limited.
Next week, many economic reports from the Eurozone are due, however, the key event will be the Federal Reserve meeting. “The dollar should stay gently bid into Wednesday’s FOMC meeting. Despite lockdown concerns elsewhere in the world fuelled by the Delta variant, we expect the Fed will have to deal with the realities of above-trend growth and inflation. While it may not specify exactly when it is ready to taper, the tone should generally support the view that tapering should emerge in 4Q this year, with the possibility of a first hike coming in 4Q22”, said ING analysts.
Lowest weekly close in months
The EUR/USD is about to post the second weekly decline in a row and the second-lowest since October of last year. “On a weekly basis, technical readings indicate that there is room for further declines. The pair has posted a lower low for a fourth consecutive week, as well as lower highs. The 20 SMA gains bearish momentum far above the current level, while technical indicators maintain their strong bearish slopes within negative levels”, explained Valeria Bednarik, analyst at FXStreet.
According to Bednarik, the EUR/USD is bearish and poised to complete a 100% retracement of its March/May rally and reach 1.1703. “Even further, the pair is developing within a descendant channel coming from June 25 high at 1.1974.”
Technical levels
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