08.10.202011:58 Forex Analysis & Reviews: Analysis and forecast for EUR/USD on October 8, 2020

Yesterday's minutes of the last meeting of the Open Market Committee (FOMC) of the US Federal Reserve did not surprise investors. The main point in the published minutes was the concern of Federal Reserve managers about the financial support that is necessary to overcome the crisis caused by COVID-19. All FOMC forecasts are linked to fiscal policy in one way or another. As for the future economic prospects of the world's leading economy, they are still assessed as extremely uncertain. However, Fed officials noted that, based on the latest macroeconomic data, the economic recovery is proceeding at a faster pace than previously expected.

If you look at today's economic calendar, you can highlight the ECB report on the meeting, which was devoted to monetary policy. The report will be published at 12:30 London time. A little later, at 13:30 (London time), data on initial applications for unemployment benefits will be received from the United States.

Daily

After an unsuccessful attempt on October 6 to raise the rate above the significant level of 1.1800, the bulls did not stop trying to resume the upward trend. Despite the rather positive Fed minutes, yesterday's trading ended with the growth of the single European currency against the US dollar. Today, at the moment of writing, the main currency pair continues to grow and tries to pass the Kijun (blue) line of the Ichimoku indicator. However, the main resistance is the simple moving average, which runs at 1.1799, which is directly below the iconic level of 1.1800. I would like to emphasize once again that only a confident consolidation above this level will create the technical prerequisites for further growth to higher prices. In this case, the next test for players to increase the rate will attempt to bring the price up from the Ichimoku indicator cloud, that is, to break through its upper limit, which passes near 1.1868.

To implement a bearish scenario, players need to push through a strong support zone of 1.1725-1.1695. I believe that consolidation under another very important level of 1.1700 will indicate the presence of serious sellers and will target the quote in the area of 1.1620-1.1600, and further targets below will be 1.1570, 1.1550, 1.1525, and 1.1500. Thus, until the pair leaves the current trading range of 1.1807-1.1695, there is a high probability of positioning in both directions.

H1

For the current uncertainty in trading on EUR/USD, it is typical that the pair is trading in an even narrower sideways range, which can be designated as 1.1781-1.1725. Given that the euro/dollar is above the moving averages used (50 MA, 89 EMA, and 200 EMA), if you decline to each of them, you can count on the support and try careful purchases with a stop at 1.1700 and a profit near the resistance of 1.1780. At the same time, if bearish candlestick signals appear under the resistance of sellers at 1.1780 on the 4-hour and/or hourly charts, this will be a signal to open sales with the nearest target of 1.1725 and a stop loss above 1.1807.