General analysis EURUSD for 29.10.2021
Current Dynamics
On Thursday EURUSD made new local highs and showed the biggest intraday gains during the last 5 months. It is noteworthy that the trading instrument reacted to the American macroeconomic statistics and ignored the ECB meeting.
The US GDP growth slowed down to 2% in the third quarter, which is much worse than the negative forecast of 2.7%. A drop in consumer spending had the biggest impact on the slowdown. In the third quarter, supply disruptions limited the availability of groceries to households. In addition, the spread of the delta strain reduced foot traffic in stores, cafes, and restaurants, and industrial firms faced labor shortages.
At the same time, the ECB once again reiterated its commitment to a soft and cautious monetary policy. The Governing Council decided to continue buying up assets amounting to 20 billion euros per month. The head of the regulator Christine Lagarde continues to insist on the temporary nature of high inflation and a tightening of monetary policy in 2022 has been excluded so far. In addition, today the pressure on the pair was given by the release of preliminary German GDP data reflecting the slowdown of the index in the third quarter from 1.9% to 1.8% while the growth to 2.2% was expected.
Today Eurostat will publish a report on the consumer price index and preliminary data on eurozone GDP. Also today at 14:30, 15:00, and 16:00 (GMT+2) a number of important releases from the USA are expected which will create significant volatility on the market.
Support and resistance levels
On the 4-hour chart, the instrument is consolidating near the upper border of the Bollinger Bands. The indicator is reversing upwards and the price range has widened, indicating that the pair will continue to rise. MACD histogram is in the positive zone, holding a buy signal. Stochastic left the overbought area, forming a strong sell signal.
- Support levels: 1.1530, 1.1560, 1.1590, 1.1620, 1.1635, 1.1662.
- Resistance levels: 1.1685, 1.1710, 1.1750
Trading scenarios
- It is possible to open short positions at the current price with a target of 1.1590 and a stop-loss at 1.1695. Implementation period: 1 day.
- Long positions should be opened above the level of 1.1695 with a target of 1.1750 and a stop-loss at the level of 1.1660. Implementation period: 1 day.