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The Probability of the EURUSD Growth Remains

11/21/2022 2:01 PM

After rapid growth in the first half of November, the EUR/USD pair is slightly corrected, reaching 1.0270.

Last week, The US dollar was supported by positive statistics from the United States, which recorded an increase in the volume of construction of new houses up to 1.425M, against the forecast of 1.410M, while the number of building permits issued also increased to 1.526M against the backdrop of experts' expectations of 1.512M, and sales in the secondary housing market in quantitative terms reached 4.43M, which was higher than the forecast of 4.38M. However, sales in the secondary housing market fell by 5.9% compared to September.

To predict the movement of the EUR/USD pair in the long term, it's worth considering the positions of central banks regarding monetary policy. The euro may strengthen against the dollar, as the US Federal Reserve is likely to slow down the pace of interest rate hikes due to the approach of the indicator to the optimal values ​​around 4.75–5.00%, which may force investors to shift their attention towards the euro. The European Central Bank (ECB), in turn, claims that it is still far from reaching inflation targets and, accordingly, will raise interest rates at a high pace.

The long-term trend reversed upwards, within which strong resistance 1.0460 was reached, which the market participants failed to break through, and the price began a downward correction to the support level 1.0090, after reaching which it will be possible to consider new purchases with the target 1.0460.

The medium-term trend is upwards. Last week, traders broke target zone 3 (1.0387–1.0366), and the next target is zone 4 (1.0599–1.0578). Now, the quotes are correcting and testing the strong support 1.0269–1.0248, in the case of holding, which the asset will continue to grow and renew the high of the last week around 1.0477.

Resistance levels: 1.0460, 1.0780. | Support levels: 1.0090, 0.9740.

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