After yesterday’s withdrawal, the EURUSD pair found current support at 1.16000 today. During the Asian session, the pair was stable at 1.15800 and recorded smaller gains in the European session. Additional current support is the MA50 moving average. Bullish scenario:
We need a continuation of this current positive consolidation and a break above the MA20 moving average.
After that, we can expect to climb the resistance zone to 1.16700.
The break above us climbs to 1.17000 and the upper trend line.
Bearish scenario:
There is a need for continued pressure on the euro and a pull below the MA50 moving average and the October lower trend line.
Our next support is at 1.15700, then the next at 1.15220 October lower low.
GBPUSD chart analysis
Pair tested the 1.37000 level in the European session after withdrawing from 1.38300. GBPUSD is still moving in the growing October channel, and we found support in the channel’s bottom line. Bullish scenario:
We need positive consolidation and a break above 1,38300.
The sequel above us pushes to a new October higher high.
Our first next resistance is at 1.38500 and then the next at 1.39000 September higher high.
Bearish scenario:
The pair should make a break below the MA50 moving average and the lower support line.
Further price drop brings us down to 38.2% Fibonacci level to 1,36700 and zone 1,365,500.
The next lower major support zone is between 50.0-61.6% Fibonacci levels 1.35700-1.36200.
Market overview:
The German government has lowered its growth forecast for this year to 2.6 percent. Still, it has increased its estimate for next year to 4.1 percent because deficiencies in semiconductor supply and rising energy costs are delaying the recovery of Europe’s largest economy. Economy Minister Peter Altmeier said the economy remained strong despite the COVID-19 pandemic, but problems in the supply chain in production and rising energy prices complicate the recovery. “Given the current supply shortfalls and high energy prices around the world, the final jump will not happen this year,” Altmeier said. The delayed recovery means that the German economy will not reach the level before the crisis this year. Forecasts predict they may reach it at the beginning of 2022. The revised government forecast for gross domestic product growth compares with the April forecast that the economy will grow by 3.5% in 2021 and by 3.6% in 2022. Altmeier said that cars manufacturers could not make hundreds of thousands of cars due to the lack of semiconductors and other electronic components. The government is ready to support the construction of local semiconductor factories with several billion euros, Altmeier said, adding that he hopes that this will soon mobilize even greater investments of companies. Widespread bottlenecks in production and unusually high demand lead to price increases, and the government expects inflation to rise to 3% this year. The government maintains that most of the price increase will be temporary. Moreover, Berlin predicts a reduction in consumer price inflation to 2.2% in 2022 and 1.7% in 2023. In October, prices in stores in the UK fell, data released by the British retail consortium showed on Wednesday. Store prices fell 0.4 percent year-on-year in October after falling 0.5 percent the previous month. It is now clear that increased costs due to labor shortages, supply chain problems, and rising commodity prices have begun to reach consumers,” said Helen Dickinson, BRC CEO.
