General analysis EURUSD for 02.11.2021
Current dynamics
Yesterday the single European currency strengthened against the dollar on the back of the publication of weak statistics in the U.S. The pressure on the dollar was given by the decline of business activity in the manufacturing sector from 60.7 to 58.4 basis points in October. Moreover, the construction expenses decreased by 0.5% in September, while experts predicted the growth by 0.4%. At the same time, the upside potential of EUR is limited by the cautious stance of ECB on QE and monetary policy plans.
Today the pair's price declined after the publication of the weak macroeconomic reports in Germany and the Eurozone. German manufacturing activity in October shrank from 58.2 to 57.8 basis points with a neutral outlook. A similar indicator in Eurozone also showed a decline of 0.2 points.
At the moment, market participants are cautious ahead of the Fed meeting. The QE reduction is already incorporated into the market dynamics. The main focus will be on information on the timing and frequency of monetary policy tightening in 2022.
Tomorrow at 14:15, 15:45, 16:00, 17:00 (GMT+2), the U.S. will release a number of important data that could create significant volatility in the market. At 20:00 (GMT+2), the Fed will announce its interest rate decision. The Fed press conference will start at 21:30 (GMT+2).
Support and resistance levels
On the 4h chart, the instrument cannot consolidate above the Bollinger Bands moving average, which acts as a key resistance level. The indicator is directed sideways and the price range remains wide. Exit from the range of 1.1580-1.1600 is required to understand the further dynamics. Histogram MACD is in the negative zone, holding a sell signal. Stochastic left the overbought area, forming a strong sell signal.
- Support levels: 1.1495, 1.1515, 1.1535, 1.1560, 1.1580.
- Resistance levels: 1.1605, 1.1635, 1.1665, 1.1695.
Trading scenarios
- It is possible to open short positions at the current price with a target of 1.1530 and a stop loss at 1.1615. Implementation period: 1-2 days.
- Long positions should be opened above the level of 1.1615 with a target of 1.1660 and a stop-loss at the level of 1.1590. Implementation period: 1-2 days.