Technical Analytics Report

EUR/USD: Technical Analysis Report 05 May 2021

EUR/USD: Technical Analysis Report 05 May 2021

 

Current Trend: EURO quotes remain under pressure

EUR shows a slight increase against USD during today’s Asian session, correcting after yesterday’s decline, which led to the renewal of local lows of April 22. 

USD retains its previous growth momentum, which was formed at the end of last week, receiving additional support after the speech of the US Treasury Secretary Janet Yellen, who did not rule out the possibility of an early rate hike in order to avoid overheating the American economy, which is demonstrating impressive growth rates. Investors are also optimistic about news of the gradual reopening of the US states against the backdrop of an active vaccination campaign and a general stabilization of the epidemiological situation. 

Market participants are focused on statistics on business activity in the services and manufacturing sectors of the eurozone from Markit. In addition, a speech by the European Central Bank representative Philip Lane is expected, who may hint on tightening monetary policy in the region. 

Support and Resistance

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic, having approached its lows, is trying to reverse upwards, indicating the risks of oversold EUR in the ultra-short term. 

To open new positions, it is necessary to wait for the trade signals to become clear.

·         Resistance levels: 1.2037, 1.2087, 1.2148, 1.2200.

·         Support levels: 1.2000, 1.1945, 1.1900, 1.1850. 

Trading Tips

To open long positions, one can rely on the rebound from the support level of 1.2000, with the subsequent breakout of 1.2050. Take-profit – 1.2148. Stop-loss – 1.2000. Implementation time: 2-3 days. 

The breakdown of 1.2000 may serve as a signal to new sales with the target at 1.1900. Stop-loss – 1.2050. 

Scenario

Timeframe: Intraday

Recommendation: Buy Stop

Entry Point: 1.2055

Take Profit: 1.2148

Stop Loss: 1.2000

Key Levels: 1.1850, 1.1900, 1.1945, 1.2000, 1.2037, 1.2087, 1.2148, 1.2200 

Alternative Scenario

Timeframe: Intraday

Recommendation: Sell Stop

Entry Point: 1.1995

Take Profit: 1.1900

Stop Loss: 1.2050

Key Levels: 1.1850, 1.1900, 1.1945, 1.2000, 1.2037, 1.2087, 1.2148, 1.2200


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