General analysis EURUSD for 09.05.2022

Current dynamics

The EUR/USD pair is trading in different directions today. The price range is limited and the volume of positions in the market is much lower than average. The trading instrument has once again reached a local low and entered a correction phase. Such dynamics allows you to profit in a short-term speculative trading, but the fundamental data still point to the fall of the pair.
The aggressive monetary policy of the Fed has made the dollar the main safe-haven asset, which confirms the volatility of the XAU/USD. Also worth noting is the positive impact of massive stimulus measures in the midst of a pandemic, and the rapid mass vaccination in the US. The US labour market is recovering strongly, showing a monthly increase in non-farm payrolls of more than 400k during the year. At the same time the American labour market continues to be in a labour shortage. In the current situation employers are forced to raise wages, which increases price pressure and provokes the Fed to speed up monetary policy tightening. In addition, the huge political influence of the US on the eurozone should not be forgotten. For example, the U.S. insists that the European Union abandon Russian energy and the eurozone economy would suffer significantly, while the U.S. would not suffer significant losses from a hydrocarbon embargo from Russian Federation.
Given the uncertainties, geopolitical risks as well as the monetary policy gap amid rising inflation, the US economy is well ahead of the European economy. The current situation indicates a further decline of the pair and a strengthening of the USD against major currencies. Some experts are already talking about an imminent parity between EUR and USD, which is a realistic scenario considering the current dynamics.
Today, the pair may be influenced by the speech of Johannes Beermann, an official of the Bundesbank, which is scheduled for 18:00 (GMT+2). On Tuesday at 11:00 (GMT+2), the ZEW is expected to publish its macroeconomic data.

Support and resistance levels

On the 4-hour chart, the instrument is testing the Bollinger Bands moving average, which is a key resistance level. The indicator is pointing sideways and the price range has contracted, indicating a downtrend correction. The MACD histogram is correcting in a neutral area and there is no signal to open positions. Stochastic also does not give a clear signal to enter the market.

• Support levels: 1.0375, 1.0440, 1.0485.
• Resistance levels: 1.0560, 1.0625, 1.0700, 1.0790.

Trading scenarios

• Short positions should be opened at the current price with a target of 1.0465 and a stop loss at 1.0590. Implementation period: 1-3 days.
• Long positions can be opened above the level of 1.0585 with a target of 1.0650 and a stop-loss at the level of 1.0532. Implementation period: 1-3 days.