EUR/USD breaking forecast on October 21, 2021

The eurozone's final data on inflation usually has no influence on the market because it mostly comes in line with preliminary estimates that have a significant impact on the market. Yesterday, it seemed that confirmation of an increase in inflation to 3.4% versus 3.0% led to a weaker euro. The currency started to go down almost at the same time as the inflation report came out. However, it was a deceptive impression. The real reason for a weaker euro was the dynamic of gas prices. At the opening of the European session, natural gas was scoring gains. Meanwhile, during the North American session, the price plunged and the euro started to rise at the same time. As a result, the currency returned to its corrective highs.

Eurozone inflation:

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Nevertheless, the main reason for such a market behavior is an empty macroeconomic calendar. Today, however, weekly jobless claims data is set to be released in the United States. Initial claims are estimated to rise by 2K and continuing ones to drop by 118K. Therefore, the state of the US labor market continues to improve and is likely to lead to a bullish US dollar.

United States Continuing Jobless Claims:

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EURUSD is retracing from the pivot point of 1.1530, where buyers came at a standstill. The quote will be temporarily held in the range of 23.6/38.2 Fibonacci levels.

The Relative Strength Index (RSI) is located between line 50 and line 70 on the hourly chart, indicating increased demand for long positions.

On the daily chart, we can see a downward trend with a corrective move in its structure.

Outlook:

In the current situation, the quote will be temporarily held between the Fibonacci levels. Consequently, market sentiment may change and a corrective move is likely to stop.

A sell signal is expected to form if the price consolidates below 1.3610, leading to a price recovery.

In terms of complex indicator analysis, there is a sell signal for short-term and intraday trading due to a bounce from the 38.2 Fibonacci level.

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The material has been provided by InstaForex Company - www.instaforex.com

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