EUR/USD is retreating below 1.1600, as the US dollar trims post-Fed losses amid a rebound in the Treasury yields. The Fed announced taper but Powell cited patience on rate hikes. Dovish Lagarde's comments and rising covid cases in Germany weigh on the euro. ECB President Christine Lagarde said on Wednesday the conditions needed for the bank to hike its policy rate was "very unlikely" to be satisfied next year. On a similar note, "ECB's forward guidance does not support the market view of a first interest rate hike in the third quarter of 2022 nor any time soon afterwards," noted ECB Governing Council member Pablo Hernandez de Cos. Finally, Governing Council member Francois Villeroy de Galhau reflected the same sentiment by stating that there is no need for the ECB to raise its policy rate next year.

On the other hand, the Fed decided to reduce its asset purchases by $15 billion per month, starting in mid-November.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES : (TECHNICALS)

The 2021-low set at 1.1524 aligns as the next target on the downside. With a decisive move below that support, the pair could extend its slide toward 1.1500 (psychological level) and 1.1440 (previous resistance). Meanwhile, the Relative Strength Index (RSI) indicator on the four-hour chart is now around 40, suggesting that there is more room on the downside before the pair becomes technically oversold.

On the other hand, the first resistance is located at 1.1600 (psychological level) before 1.1620 (200-period SMA, 100-period SMA, Fibonacci 23.% retracement of September downtrend). In case buyers manage to lift the price above the latter, the next hurdle could be seen at 1.1670 (Fibonacci 38.2% retracement).

Will EURUSD Bounce back from 50% Fibo !

Nov 04 2021

Stop Loss -0.29%

Holding time 6d2hr

1.15340

Entry price

1.15000

Stop loss price