General analysis EURUSD for 01.11.2021
Current dynamics
Last Friday EURUSD pair significantly lost in value, despite the strong macroeconomic statistics of the Eurozone. The European economy is recovering faster than the American economy in the third quarter thanks to the growth of business and consumer activity and more favorable epidemiological situation. The Eurozone consumer price index rose 4.1% in October, against a more modestly positive forecast of 3.7%. The acceleration of European inflation should prompt the European regulator to act proactively, but the ECB's governing council continues to be cautious. Christine Lagarde said last week that the regulator will continue to buy assets at a rate of 20 billion euros a month. The European Central Bank's "dovish" stance is the main reason for the weak pair at the moment.
At the same time, market participants are confident that the Fed will announce a QE reduction at the next meeting. Strong inflation data and rising U.S. wages could prompt a more rapid tightening of monetary policy. Currently, the probability of a rate hike in the first half of 2022 is estimated at 90%.
Today at 17:00 (GMT+2), U.S. manufacturing activity data was released.
Support and resistance levels
On the 4-hour chart, the instrument is recovering at the bottom of the Bollinger Bands. The indicator is turning downward and the price range has widened, indicating that the pair will continue to fall after the intraday correction. The MACD histogram is in the negative zone, holding a sell signal. Stochastic has left the oversold area, forming a strong buy signal.
- Support levels: 1.1495, 1.1515, 1.1535, 1.1560.
- Resistance levels: 1.1585, 1.1605, 1.1635, 1.1660, 1.1700.
Trading scenarios
- It is possible to open short positions at the current price with a target of 1.1515 and a stop loss at 1.1605. Implementation period: 1-2 days.
- Long positions should be opened above the level of 1.1610 with a target of 1.1660 and a stop-loss at the level of 1.1585. Implementation period: 1-3 days.