General analysis EURUSD for 04.11.2021
Current dynamics
Yesterday EURUSD strengthened moderately after the Fed's monetary policy meeting. The regulator announced the start of QE reduction with the volume of 15 billion a month, starting from November. Thus, the stimulus program will be wrapped up by June 2022. The Fed did not forecast the timing of the interest rate hike but rejected his words about the temporary nature of high price pressure. Given that the regulator plans to reach full employment by mid-2022, investors expect the rate hike to coincide with a full withdrawal of the quantitative easing policy.
The instrument traded lower today after the release of weak Eurozone business data in the first half of the day. Additional pressure was given by the strong report on the number of jobless claims, which is important before the U.S. employment statistics tomorrow. Economists are predicting a strong report. Private companies are actively hiring. However, despite the growth in the service sector, labor shortages have led to a decline in the employment component within the composite index. Therefore, the final data may be higher than in September, but lower than forecast.
Tomorrow at 14:30 (GMT+2), the most important labor market report in the U.S. will be released, which will create significant volatility in the market.
Support and resistance levels
On the 4-hour chart, the instrument is testing the lower boundary of the Bollinger Bands, which acts as a key support level. The indicator shows signs of a downward reversal and the price range has contracted, indicating the formation of a downtrend after a brief correction. The MACD histogram is in the negative zone, holding a weak sell signal. Stochastic is approaching the oversold area, no signal to open positions has been formed.
- Support levels: 1.1495, 1.1515, 1.1555.
- Resistance levels: 1.1590, 1.1615, 1.1650, 1.1685.
Trading scenarios
- It is possible to open short positions at the current price with a target of 1.1495 and a stop-loss at 1.1580. Implementation period: 1-2 days.
- Long positions should be opened above the level of 1.1580 with a target of 1.1625 and a stop-loss at 1.1555. Implementation period: 1-2 days.