EUR/USD Under Bearish Pressure, More Downside Likely
Dmitriy Gurkovskiy | Nov 15, 2021 07:46AM ET
In mid-November, the EUR/USD pair remains weak despite its attempts to rebound from the lows. On Monday, it is mostly trading around 1.1460.
The “greenback” is still supported by the rising inflation in the US. In October, the CPI growth was the highest over the last 30 years. This fact made investors think that the Fed might be more active in tightening its monetary policy. However, the regulator never said anything to support this idea but market players are sure of this outcome.
This week’s key highlight will be the US retail sales report. Market expectations imply +1.1% MoM in October. If they match actual readings, the indicator will rise for the third consecutive month – that’s a good signal for the country’s economy.
In the H4 chart, after forming a new consolidation range around 1.1563 and breaking it downwards, EUR/USD has reached the short-term downside target at 1.1437; right now, it is consolidating near the lows.
If the price breaks this range to the upside, the market may correct towards 1.1500 and then resume trading downwards with the downside target at 1.1400.
From the technical point of view, this scenario is confirmed by MACD Oscillator. The signal line is moving below 0 outside the histogram area, thus implying further growth towards 0.
After rebounding from 0 to the downside, the line may start another decline to reach the lows.
As we can see in the H1 chart, after breaking 1.1500 and then reaching 1.1433, EUR/USD had completed the correction towards 1.1460. Currently, it is consolidating below the latter level.
If the price breaks this range to the upside, the market may grow to reach 1.1500 (at least) and then resume trading downwards with the target at 1.1400.
From the technical point of view, this scenario is confirmed by the Stochastic Oscillator. The signal line is moving below 80 and may soon reach 50.
If the line breaks the latter level, it may continue falling towards 20. Otherwise, the line may grow to rebound from 80 and then resume moving to reach 20.
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