EUR/USD retreats from daily highs around 1.1585 to 1.1550

• EUR/USD tested the 1.1600 level unsuccessfully, on the back of US dollar strength.
• The US Dollar Index trims some of its last week’s losses, sits at 94.32.
• The EUR/USD is downward pressured, as showed by the daily and the 1-hour chart, could test 2021 lows.

The EUR/USD is trading at 1.1559, down 0.09% during the New York session at the time of writing. The market sentiment has dampened throughout the day, as witnessed by US stock indices trading with losses between 0.12% and 0.42%.

The US Dollar Index that tracks the greenback’s performance against a basket of six peers rises 0.24%, currently at 94.32, boost the US dollar, exerting downward pressure on the EUR/USD pair.

In the European session, the EUR/USD pair advanced mainly on the back of the British pound. On the weekend, some Bank of England’s members expressed concerns about inflation, and the possibility of hiking rates, as it threatens to be stickier than expected. While the GBP/USD rose near 1.3700, the EUR/USD reached 1.1585 but retreated later.

On Tuesday, the Eurozone economic docket will feature the Zew Survey of Economic Sentiment and current situation. At the same time, ECB’s Chief Economist Philip R. Lane and ECB’s member Frank Elderson will hit the wires. Across the pond, the JOLTS Job Openings for August, expected at 10.925M, could offer some fresh impetus for EUR/USD traders.

EUR/USD Price Forecast: Technical outlook

Daily chart

EUR/USD is trading well below the daily moving averages (DMA’s), pushing towards last Friday’s lows, around 1.1540s. Momentum indicator like the Relative Strenght Index (RSI) is at 32, exited from oversold levels, suggesting the downward bias remains. A break below 1.1540 could open the door for 2021 low at 1.1528.

1-hour chart

The single currency tested last Friday’s highs around 1.1585, unsuccessfully retreating below the daily pivot point at 1.1566. On the upside, the confluence of the 50-simple moving average (SMA) and the daily pivot point impose strong resistance around 1.1566.

On the other hand, the confluence of the S1 pivot point level at 1.1547 near the last Friday’s low at 1.1540 acts as support.`However, the Relative Strength Index (RSI) at 43 is aiming lower, suggesting that a move towards the latter might be on the cards.

KEY ADDITIONAL LEVELS TO WATCH