#EURUSD @ 100539 struggles to extend three-month downtrend around nearly two-decade low, Pivot Orderbook analysis

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• EUR/USD struggles to extend three-month downtrend around nearly two-decade low.
• Markets turned dicey but hawkish central bankers, firmer EU inflation data kept bears in driver’s seat.
• Geopolitical, covid news also exerted downside pressure ahead of the key US data.
• German Retail Sales, US ISM Manufacturing PMI could offer intraday directions.

The pair currently trades last at 1.00539.

The previous day high was 1.0055 while the previous day low was 0.9982. The daily 38.2% Fib levels comes at 1.0027, expected to provide support. Similarly, the daily 61.8% fib level is at 1.001, expected to provide support.

EUR/USD seesaws around 1.0050, probing a three-day rebound from the yearly low, after declining for three consecutive months. The pair’s latest inaction could be linked to the anxiety ahead of the key data/events while the daily gains could be attributed to the hawkish EU data versus softer US numbers. Even so, hawkish Fed bets and fears of recession kept the quote pressured.

As per the first readings of the Eurozone Harmonised Index of Consumer Prices (HICP) release for August, the inflation in the bloc rose to 9.1% YoY versus 9.0% expected and 8.9% prior. On Tuesday, Germany’s HICP for the stated month grew 8.8% while matching expectations, versus 8.5% prior.

Following the data, the European Central Bank (ECB) “urgently needs to act decisively next week,” the central bank’s Governing Council member and German central bank head Joachim Nagel said on Wednesday. “We need a strong rate hike in September,” the policymaker added.

Additionally, Germany’s Chancellor Olaf Scholz said that the government will present the next relief package soon.

On the other hand, US ADP Employment Change rose by 132K versus 288K expected and 270K prior. However, the average wage increases in the US in August were 7.6% y/y and the same kept the Fed policymakers hawkish.

Cleveland Federal Reserve Bank President Loretta Mester said on Tuesday that she was not anticipating the Fed to cut rates next year, as reported by Reuters. The policymaker also stressed that inflation must be brought under control, even if it means a recession. Restoring stability to consumer prices is now the clear priority for many key central banks, and with inflation so strong, that will come at the expense of growth.

Moving on, Germany’s Retail Sales for August and the US ISM Manufacturing PMI could entertain the EUR/USD traders ahead of Friday’s US Nonfarm Payrolls (NFP).

Although 0.9900 puts a short-term floor under the EUR/USD prices, July’s low near the 1.000 threshold precedes a downward sloping trend line from February, near 1.0190, to restrict the pair’s upside momentum.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0051 at the time of writing. Pair opened at 1.0015 and is trading with a change of 0.36 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.0117, 50 SMA 1.0206, 100 SMA @ 1.0414 and 200 SMA @ 1.0815.

The previous day high was 1.0055 while the previous day low was 0.9982. The daily 38.2% Fib levels comes at 1.0027, expected to provide support. Similarly, the daily 61.8% fib level is at 1.001, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.998, 0.9944, 0.9907
• Pivot resistance is noted at 1.0052, 1.009, 1.0125

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