The daily chart for EUR/USD shows that on Friday it touched the top of the downtrend channel around 1.1691, but could not break this channel. From this point, there was a very rapid decline to the support level of 1.1535. This fall was due to the strength of the US dollar and also due to investors' fear regarding the Fed's monetary policy meeting which will be announced this week. It is likely that investors are taking refuge in the US dollar while waiting relevant data regarding the course of the US economy.
At the beginning of the Asian session, the euro is trading above 1/8 of a murray and below 2/8 of Murray and below the SMA of 21. It is likely that the euro will continue under downward pressure only if EUR/USD trades firmly below 1.1596. On the other hand, the support at 1.1535 could give the pair a technical bounce and we could expect a recovery of the euro towards the top of the downtrend channel around 1.1659 in the coming days.
The inflation data published last week showed a 3.6% year-on-year increase. This figure could cement the outlook that the Central Bank of the United States could cut the purchase bond by the year end to prevent the economy from deteriorating.
This week, the Federal Reserve of the United States will announce its decision regarding its monetary policy. The Central Bank is expected to announce the exact date to reduce part of the 120,000 million dollars per month. The WE program could ne terminated in the middle of the year 2022. It is likely that this data could strengthen the US currency in the medium term. If so, it could put downward pressure on the Euro and we could see a fall towards the support of -2/8 of murray around 1.1352.
According to the daily chart, we observe that since May 25 EUR/USD began its downward trend. It has been oscillating within this channel until now. The last test happened on October 28, and the pair still remains within this channel. The euro is expected to continue under this trend in the next few days. Only a sharp breakout and a consolidation above 1.1660 would be the start of a bullish scenario and the pair could rise to the 200 EMA around 1.1803.
The market sentiment report for today shows that there are 67.20% of operators who are buying the Euro. This is a negative sign and it is likely that in the next week there may be a stronger fall of the euro towards the 1.1474 support. If bearish pressure prevails it could fall to -1/8 murray at 1.1413.
Our trading plan for the next few hours is as long as EUR/USD remains above 1/8 (1.1535), we can buy, with targets at 1.1596 (2/8) and it will be able to test the top of the bearish channel. On the other hand, a pullback to the top of the bearish channel will be a sell opportunity below 1.1659 with targets towards 0/8 murray around 1.1474.
Support and Resistance Levels for November 01 - 02, 2021
Resistance (3) 1.1615
Resistance (2) 1.1585
Resistance (1) 1.1569
Support (1) 1.1548
Support (2) 1.1513
Support (3) 1.1498
A trading tip for EUR/USD for November 01 - 02, 2021
Buy above 1.1535 (1/8) with take profit at 1.1596 (SMA 21) and 1.1659 (top bearish channel), stop loss below 1.1500.The material has been provided by InstaForex Company - www.instaforex.com