EUR/USD Projected: Further Gains Possible If 1.1600 Holds

After finishing the day in the green on Monday, the EUR/USD has maintained its bullish trend and touched 1.1600 early on Tuesday afternoon. The structural view implies that the duo may be able to prolong their rebound, but remarks from monetary authority executives and data announcements may restrict the pair’s potential gains. On Monday, Chief Economist Philip Lane of the ECB maintained the “transient inflation” theme while adopting a more upbeat tone in regards to the economic prospects. In Lane’s opinion, “economic output might surpass our predictions if consumers develop confidence and save less than we now expect.”

St. Louis Federal Reserve Chairman James Bullard told Fox Business Network that he believes the Federal Reserve will raise interest rates twice more in 2022 than it has in the past. As of now, it is too early to conclude that these remarks are having an influence on the EUR/USD performance, given that the overall picture—the policy difference between both the Fed and the European Central Bank—remains constant. Later during the day, both Christine Lagarde, head of the European Central Bank and Jerome Powell, chairman of the Federal Open Market Committee, will give addresses.

This week, the ZEW Survey-Economic Confidence readings for the Eurozone countries and Germany will be featured on the European economic agenda. On Monday, statistics from Germany revealed that exports fell by 0.7% monthly in September, contrary to the market’s estimate of a 0.5% gain. It is possible that the EUR/USD pair may struggle to regain momentum if the ZEW mood data disappoints, given that the currency union lost interest as a result of this data. Finally, the United States Bureau of Labor Information will release the October Producer Price Index (PPI) numbers.

Technical Evaluation Of The EUR/USD

EUR/USD CHART Source: Tradigview.com

On a four-hour graph, the following short-term goal is situated at 1.1620 if the EUR/USD succeeds in closing over 1.1600 (stationary level, 100-period SMA, 200-period SMA on the four-hour graph) and begins to use this level as stability (stationary level). The next two resistance levels are at 1.1650 and 1.1670.

1.1530 (stationary level) is an intermediate safety area before 1.1580/70 (50-period SMA, stationary level) and 1.1500 (stationary level) are reached on the decline (psychological level). The relative strength index (RSI) signal on the four-hour graph, on the other hand, is still above 50, indicating that the combination has further opportunity to rise until buyers tire themselves.

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