General analysis EURUSD for 18.04.2022

Current dynamics

The trading volume in Forex market is limited today due to Easter. The European market is closed, while the American market resumes working on Monday. The pair is moving within the down-trend correction. Today's macroeconomic events include a speech by Federal Reserve official Bullard, who is known for his hawkish stance on the regulator's monetary policy.
The American currency is an attractive asset in the current circumstances, which is not the case with the EUR. American consumer has some financial headroom thanks to monetary stimulus and the labor market is understaffed with plenty of offers from employers. Bloomberg is confident that the Fed will raise the rate at every meeting during 2022, with the key rate almost certainly increasing by 50 basis points at the May meeting. This would bring the rate to 3% next year. At the same time we should consider the risks of recession, however the current situation indicates that the pair may fall further towards the range of 1.0620-1.0550 as soon as in May. In this regard, the speech of Jerome Powell at the summit of the International Monetary Fund with the World Bank on Friday will be important.
Pressure on the European currency remains on the escalation of the conflict in Ukraine, as well as the rejection of Russian oil by the European Union. Also a negative factor for the trading instrument is the need for a second round of the French presidential election. The gap between Macron and Le Pen is narrowing and a Le Pen victory would turn all French politics around 180 degrees.

Support and resistance levels

On the 4h chart, the instrument is testing the strong psychological support level of 1.0800. The Bollinger Band indicator is pointing downwards and the price range is slowly widening, which indicates that the pair will continue falling after the correction. The MACD histogram is in the negative zone, holding a strong sell signal. Stochastic has reversed upwards at the edge of the oversold area, forming a weak sell signal. 

• Support levels: 1.0720, 1.0755, 1.0800.
• Resistance levels: 1.0835, 1.0905, 1.1000, 1.1060.

Trading scenarios

• Short positions should be opened at the current price with a target of 1.0720 and a stop loss at 1.0845. Implementation time: 2-4 days.
• Long positions can be opened above 1.0845 with target 1.0930 and stop-loss at 1.0780. Implementation period: 1-3 days.