General analysis EURUSD for 15.12.2021
Current Dynamics
On Tuesday EURUSD lost ground despite the positive statistics on industrial production in the Eurozone. In the second half of the day the pressure on the pair was put by the report on producer prices in the U.S. The inflation indicator once again pointed to the growing price pressure, which makes the Fed to conduct an aggressive monetary policy.
The meeting of the U.S. regulator will be held today. The market participants are waiting for the Fed's comments on three main topics:
- The pace of QE reduction.
- Inflation forecast.
- Forecast of economic growth.
- Number of key rate hikes in 2022.
The Fed is now reducing the volume of asset purchases by 15 billion each month. The regulator is expected to increase the volume to 25-30 billion in month. However, if the central bank is less aggressive, the dollar may fall as acceleration of refusal from QE is already incorporated in the market dynamics.
Another important event for the pair is the ECB meeting tomorrow. Many European economists think that the QE policy of the European regulator is detrimental for the European economy. There is a small chance that the European Central Bank will announce a plan to abandon QE, which will contribute to a sharp strengthening of the EUR.
Today at 15:30 (GMT+2) the release of retail sales statistics is expected. The Fed meeting will start at 21:00 (GMT+2). Investizo recommends market participants to be cautious today, as both events may cause a strong volatility.
Support and resistance levels
On the 4-hour chart the instrument trades at the bottom of the Bollinger Bands. The indicator is pointing down and the price range is widening, indicating a further decline in the pair. Histogram MACD is declining in the negative zone, forming a sell signal. Stochastic has left the oversold area, forming a buy signal.
- Support levels: 1.1175, 1.1200, 1.1230, 1.1250.
- Resistance levels: 1.1290, 1.1325, 1.1350, 1.1380, 1.1410.
Trading scenarios
- Long positions should be opened above the level of 1.1290 with a target of 1.1385 and a stop-loss at 1.1250. Implementation period: 1-2 days.
- Short positions can be opened below the level of 1.1250 with a target of 1.1190 and a stop-loss at the level of 1.1280. Implementation period: 1-2 days.