26.11.2021: USD to close trading week with rise. Outlook for EUR/USD and GBP/USD
Today, the currency market should have continued its stagnation. However, the euro is rapidly gaining in value. Let us find out the reasons for such changes in the market.
The euro began rising when Christine Lagarde was delivering a speech. Although she did not say anything new about the parameters of monetary policy, she dropped several important hints. First of all, the ECB is ready to change its attitude towards the key interest rate. Secondly, during the meeting, which is scheduled for December, the regulator may take some crucial decisions.
Notably, these are only conclusions based on the hints dropped by the ECB President. Judging by the market reaction, traders have already priced in the information. However, it is unknown whether their predictions are true. Meanwhile, the euro continues climbing amid the expectations of possible changes in the ECB’s policy. If the currency goes on strengthening, the pound sterling may also follow its counterpart. By the way, the British currency is still falling due to the inertial movement.
Let us take a look at the trading charts.
After touching the support level of 1.1180, the euro/dollar pair rebounded and then stagnated. Notably, the volume of short positions remained unchanged. Although the euro is significantly oversold, a full-sized correctional movement has not started yet.
Until the pair breaks the mentioned support level, there will be a risk of a technical correction. This may push the euro from the oversold levels.
If the price fixes below 1.1150 on the four-hour chart, traders will receive sell signals.
Meanwhile, the pound/dollar pair broke the resistance level of 1.3350 and dropped. As a result, the volume of short positions increased. The level of 1.3300 is acting as a target.
Although the pound sterling has been dropping for the fifth day in a row, it has not hit oversold levels on the four-hour and daily charts.
It is quite possible that bears are still keeping control over the market. If the price fixes below 1.3290 on the four-hour chart, the volume of short positions may jump. In this case, the pair is likely to slide to 1.3150.
00:43 ECB’s key interest rate
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