EURUSD Technical Analysis / Forex Technical Analysis

EURUSD Technical Analysis – Key Trading Insights

In today’s comprehensive EURUSD technical analysis, we will first scrutinize the current economic conditions in the Eurozone. Then, we will meticulously delve into the details of the EURUSD pair’s technical analysis.

Early November’s Euro Position

Reuters — As November began, the Euro traded around the $1.06 mark. This was a critical time for traders trying to understand the global economic situation and the direction of monetary policy.

As expected, the Federal Reserve decided to keep the fed funds rate steady in its November meeting, signaling an end to rate hikes. On the other side of the Atlantic, the European Central Bank (ECB) also decided not to change interest rates in October, marking the first time in over a year that rates remained unchanged. The ECB clarified that borrowing costs would stay high for some time.

Last month, inflation in the Euro Area dropped more than expected to 2.9%, getting closer to the ECB’s 2% target. However, there are signs that the ECB’s policy of high interest rates is damaging the economy.

Preliminary data showed an unexpected 0.1% shrinkage in the Eurozone’s GDP in Q3, worse than predictions of no change. Germany’s economy also saw a slight decrease of 0.1%. Meanwhile, October’s PMIs indicated that the services and manufacturing sectors are contracting.

EURUSD Technical Analysis – Key Trading Insights

The EURUSD currency pair has exhibited a range-bound trading pattern, oscillating between 1.051 and 1.068 since October 23. A noteworthy observation is the formation of a hammer candlestick pattern on the daily chart, with the pair currently trading above the monthly pivot. However, as the pair remains below the Ichimoku cloud, we focus on identifying potential selling opportunities.

EURUSD Technical Analysis – Key Trading Insights

The RSI indicator has crossed above 50, suggesting that the EURUSD price might ascend to R1 (1.067 resistance). This level presents an attractive entry point for short positions, particularly if the market forms a longwick candlestick, a doji, or a bearish engulfing pattern.

EURUSD Technical Analysis – Key Trading Insights

An alternative scenario for short trading in EURUSD involves waiting for the pair to breach S1 (1.049 support). In this situation, the pace of decline in the pair could accelerate, with subsequent targets being S2 (1.042) and S3 (1.032).

Stay tuned for more updates on EURUSD’s technical analysis and potential trading strategies.