General analysis EURUSD for 25.10.2021

Current dynamics

Last week EURUSD was strengthening despite strong macroeconomic reports from the U.S. Market participants doubt the temporary nature of high inflation, which is the main reason for the decline in dollar purchases. Previous global crises followed a similar scenario, but despite significant fiscal and monetary stimulus, consumer prices have not accelerated as they are now. Despite Fed and Treasury Secretary Janet Yellen's comments that inflation and consumer prices, in particular, are under control, the market believes that high prices in the United States will continue for a long time.

On Friday, Fed Chairman Jerome Powell once again confirmed the imminent reduction of QE. The next meeting of the Open Market Committee will be held on November 2 and 3. Investors expect the Fed officials to be more specific on the timing of monetary policy tightening.

Today the trading instrument is under the pressure amid the publication of weak macroeconomic statistics in Germany. Indexes of business expectations and business climate from IFO in October slowed down more than expected, which indicates a worsening of conditions and expectations in German business circles.

No important macroeconomic releases from either side are expected before the end of the day. Tomorrow at 16:00 (GMT+2) in the U.S. consumer confidence and U.S. primary home sales will be released.

Support and resistance levels

On the 4-hour chart, the instrument broke through the Bollinger Bands moving average and is currently testing the indicator's lower boundary, which is the nearest support level. The indicator is turning downward and the price range has widened, indicating that a downtrend is forming. The MACD histogram is consolidating in the neutral area, no signal to open positions has been formed. Stochastic is turned down at the border of the overbought area and retains a sell signal.

Support levels: 1.1485, 1.1525, 1.1540.

Resistance levels: 1.1560, 1.1575, 1.1610, 1.1640, 1.1680.

Trading scenarios

It is possible to open short positions at the current price with a target of 1.1555 and a stop-loss at 1.1630. Implementation period: 1 day.

Long positions should be opened above the level of 1.1635 with a target of 1.1700 and a stop-loss at the level of 1.1595. Implementation period: 1-3 days.