EUR/USD Analysis – October 27, 2021

Choppy Session In Play

The EUR/USD is trading mildly flat, around 1.1600 amid weakening market sentiment, as China Evergrande worries and US-Sino tensions resurface. Despite mounting inflation fears, the US dollar remains strong. The focus is on the US Durable Goods statistics, corporate results, and the ECB decision.

The Euro has proved itself to be stabilized at the 1.16 level, and at this point, I believe this is a critical level. It operates as a "price magnet," so it is not surprising to see it in this approximate vicinity. The Euro has been falling for several months, but it has made a minor rally in the last couple of weeks.

The US dollar has been somewhat weak, but the Euro is likely to be the one currency where we see the greatest probability of a reversal. After all, the Euro has been a miserably weak currency. The dollar slipped lower in early European trade Wednesday, as markets remained calm ahead of next week's Federal Reserve meeting, while the United Kingdom's budget remains in place. The Federal Reserve has officially entered a blackout period ahead of next week's policy-setting meeting, and traders are now focusing on a succession of significant data releases. The September durable goods orders are released on Wednesday, but the 3Q GDP announcement on Thursday and the September core PCE deflator on Friday will garner the most interest.

In September, consumer confidence in Germany rose once more. Economic and income expectations are rising, as is the proclivity to buy. As a result, GfK predicts a 0.3-point increase in consumer mood in October, up 1.4 points from September of this year (revised from -1.1 points).

These are the findings of the September 2021 GfK Consumer Sentiment Survey. The current rise in income prospects, tendency to consume, and a decrease in the propensity to save contribute to a recovery in consumer sentiment in Germany.

EUR/USD Intraday Technical Levels

Support Resistance

1.1576 1.1652

1.1545 1.1697

1.1501 1.1727

Pivot Point: 1.1621

EUR/USD - Technical Outlook

The EUR/USD is trading with a strong bearish bias at 1.1604 level, having violated the upward trendline at 1.1631 level. The closing of candles below 1.1620 suggests a selling bias among investors. On the bearish side, the EUR/USD’s immediate support prevails at the 1.1590 level.

Furthermore, an additional breakout of 1.1590 support could expose the pair towards the 1.1576 level. Moreover, the breakout of 1.1576 exposes the pair towards 1.1546.

On the higher side, the EUR/USD’s immediate resistance stays at the 1.1620 level as that’s been extended by a pivot point resistance level. Above this, the EUR/USD will be exposed to the next resistance areas of 1.1650 and 1.1665 levels. The RSI and Stochastic are supporting a selling bias on Wednesday. Therefore, the bearish bias dominates below 1.1620 and vice versa. All the best!