EUR/USD Mid-Session Technical Analysis for October 28, 2021

The Euro is inching slightly higher against the U.S. Dollar on Thursday shortly before the European Central Bank (ECB) monetary policy announcement at 11:45 GMT.

Earlier in the session the common currency traded as low as 1.1582 as investors awaited the central bank’s views on the outlook for inflation and an expected push back against rising interest rate projections.

At 11:16 GMT, the EUR/USD is trading 1.1607, up 0.0004 or +0.04%.

Ahead of the ECB monetary policy statement and economic projections, Reuters is reporting that analysts expect officials to push back against growing expectations for a rate hike next year, even though it may admit that inflation will be higher than projected. Euro Zone inflation expectations are also soaring, with one market gauge hitting a seven-year high this month.

“Most in the market probably expect some kind of pushback against the market pricing of 2022 ECB tightening, where a 10bp rate hike is now priced for next September. This all seems a little obvious and perhaps a reason for EUR/USD not to sell-off were Lagarde to deliver,” ING analysts said in a note.

In other words, some feel that today’s ECB announcements have already been factored into the Euro’s price so don’t be surprised by a counter-trend rally.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1669 will change the main trend to up. A move through 1.1524 will signal a resumption of the downtrend.

The short-term range is 1.1524 to 1.1669. The EUR/USD is currently trading on the strong side of its pivot at 1.1597.

The minor range is 1.1572 to 1.1669. Its pivot comes in at 1.1621.

The intermediate range is 1.1755 to 1.1524. Its 50% level is potential resistance at 1.1640.

The main range is 1.1909 to 1.1524. If the main trend changes to up then look for a test of its retracement zone at 1.1717 to 1.1762.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to 1.1597.

Bearish Scenario

A sustained move under 1.1597 will indicate the presence of sellers. The first downside target is 1.1582, followed by the minor bottom at 1.1572. The latter is a potential trigger point for an acceleration to the downside with 1.1524 the next likely target.

Bullish Scenario

A sustained move over 1.1597 will signal the presence of buyers. This could start a labored rally with 1.1621 and 1.1640 the first two targets.

The increase could pick up speed over 1.1640 with the rally extending into 1.1669. Taking out this level will change the main trend to up. This could trigger an acceleration into 1.1717 to 1.1762.