General analysis EURUSD for 02.12.2021

Current dynamics

On Thursday EURUSD has slightly strengthened, but in order to consolidate the uptrend it is necessary to break the level of 1.1370. Yesterday there was the second speech of Fed chief Powell in the US Congress. As expected, the rhetoric of the official was hawkish. The regulator will try to force a withdrawal of QE in order to normalize the monetary policy more quickly. On December 14 and 15, the central bank will discuss options for accelerating the abandonment of asset purchases.

The ECB, unlike most regulators, has so far been extremely cautious on monetary policy. At the same time the price pressure in the euro zone, as well as in all developed economies, has increased. Now euro zone politicians are beginning to put pressure on the ECB to start making significant adjustments to monetary policy. Given rising inflation, slowing economic activity, and the spread of a new strain of the coronovirus, Christine Lagarde may reconsider her attitude toward quantitative easing policy. If ECB starts discussing a QE rollback, EUR may become one of the most successful currencies in the medium term.
Today at 15:30 (GMT+2) the U.S. initial jobless claims date will be released. Tomorrow, ECB head Lagarde will give a speech at 10:30 (GMT+2) and employment and inflation data will be released at 15:30 and 17:00 (GMT+2).

Support and resistance levels

On the 4-hour chart the instrument is strengthening at the top of the Bollinger Bands. The indicator is reversing upwards and the price range is limited, indicating a correction. MACD histogram retains a buy signal. Stochastic has not formed a signal to open positions.

• Support levels: 1.1190, 1.1260, 1.1320, 1.1330.
• Resistance levels: 1.1370, 1.1430, 1.1485.

Trading scenarios

• It is possible to open short positions below the level of 1.1305 with a target of 1.1260 and a stop-loss at the level of 1.1335. Implementation period: 1-2 days.
• Long positions should be opened above the level of 1.1370 with a target of 1.1430 and a stop-loss at the level of 1.1345. Implementation period: 1-2 days.