General analysis EURUSD for 22.11.2021

Current dynamics

The single European currency shows weakness against the U.S. dollar. A strong gap in the parameters of the monetary policy of the Fed and the ECB continues to exert pressure on the EUR. Additional pressure on the trading instrument was formed amid another wave of pandemics in Europe.

Austria became the first country of the region, which returned a full lockdown. In all likelihood, the largest economy of the European Union, Germany, will also introduce tough social distancing measures in the coming days. Also worth noting is the introduction of a full lockdown in the Netherlands. In the future, a forced quarantine will lead to a drop in economic activity in the EU. Another problem for the region is the energy crisis. It is already obvious that GDP in the Eurozone will slow down in the fourth quarter, while the growing US GDP is a significant reason for a further decline of the instrument. Difficult situation may lead ECB to abandon its plans to curtail emergency asset buyback program. At the same time, the Fed is considering options to force QE cuts. Several key members of the committee are pushing to end the program in the first quarter of 2022 in order to raise the rate in the second.

Today at 17:00 (GMT+2), the U.S. secondary market home sales will be released. Tomorrow at 10:30 a.m. (GMT+2), it will release data on German business activity.

Support and resistance levels

On the 4-hour chart the instrument decreases along the lower Bollinger band. The indicator is directed downward and the price range has widened, indicating the continuation of the downtrend. MACD histogram is in the negative zone, holding a strong sell signal. Stochastic does not give a clear signal to open positions.

• Support levels: 1.1130, 1.1190, 1.1250.
• Resistance levels: 1.1310, 1.1375, 1.1435, 1.1485, 1.1550.

Trading scenarios

• Short positions can be opened at the current price with a target of 1.1190 and a stop-loss at 1.1330. Implementation period: 2-3 days.
• Long positions should be opened above the level of 1.1320 with a target of 1.1375 and a stop-loss at the level of 1.1290. Implementation period: 1-3 days.