In the European session, EUR / USD fell to the low of 1.1584. After this, the pair is rebounding, having formed a descending wedge pattern. The break of this technical figure could give the euro bullish momentum and EUR/USD be able to rise to the level of 1.1660 where the EMA of 200 is located.
At the beginning of the week, the dollar index has been strengthening. For today, #USDX is located above the 200 EMA and the 21 SMA. The US dollar is likely to continue its upward movement which could limit the strength of the euro and we could see a drop back towards the 2/8 murray support around 1.1596.
Since October 25, EUR/USD has been consolidating above the 2/8 murray support. As long as the pair remains above this level, the euro is likely to try another bounce, so EUR/USD could keep on with its upward movement. Conversely, a daily close below 1.1596 would give the possibility of a bearish move to the 1/8 murray level around 1.1535.
On October 25, the eagle indicator touched the level of 95 points which meant an imminent downward correction. Having been released from this upward pressure, we see that the indicator is again generating a bullish signal. This could be a good opportunity for buy at current price levels, targeting 1.1551 (200 EMA).
Investors will be very attentive to the meeting of the European Central Bank that is scheduled for tomorrow, Thursday. The consensus among operators is that the ECB announces its objective of increasing the interest rate by the end of 2022. This announcement could give the euro strong volatility, only if the bank is more determined.
Our trading plan is to buy EUR/USD at current price levels above 1.1596 or if the pair breaks the descending wedge pattern (1.1604), targeting 1.1630 and 1.1657. The eagle indicator is showing a bullish signal which supports our strategy for the next few hours.
Support and Resistance Levels for October 27 - 28, 2021
Resistance (3) 1.1659
Resistance (2) 1.1642
Resistance (1) 1.1627
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Support (1) 1.1585
Support (2) 1.1560
Support (3) 1.1536
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A trading tip for EUR/USD for October 27 - 28, 2021
Buy above 1.1596 or 1.1604 (descending wedge) with take profit at 1.1642 and 1.1659 (EMA 200), stop loss below 1.1560.