EUR / USD Forex Technical Analysis – Trader’s reaction to short-term pivot at 1.1640 sets the tone for next week

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The euro rose against the US dollar on Friday after a report showed eurozone inflation expectations hit the European Central Bank’s 2% target. Gains may have been capped, however, buy a report that shows eurozone business growth slowed in October.

On Friday, EUR / USD stood at 1.1644, up 0.0021 or + 0.18%.

On Friday, a key market indicator of eurozone inflation expectations exceeded the ECB’s inflation target of 2% for the first time in seven years, just as the central bank assesses how to proceed with the stimulus to the end of its support in the era of the pandemic.

The five-year and five-year forward inflation swap jumped 10 basis points to 2.0528%, the highest since 2014.

In addition, growth in business activity in the euro area slowed this month, with companies facing soaring costs due to supply chain constraints, while the dominant service industry in the bloc was struggling in the face of lingering concerns over COVID-19, an investigation found on Friday.

The IHS Markit Flash Composite Purchasing Managers Index (PMI), a good indicator of overall economic health, fell to a six-month low of 54.3 in October from 56.2 in September.

That matched the lower forecast of a Reuters poll that predicted a more modest drop to 55.2 but was still comfortably above the 50 mark that separates growth from contraction.

Technical analysis of the daily swing chart

The main trend is downward on the daily swing chart. However, the momentum is on the rise.

A trade up to 1.1755 will change the main trend upward. A move to 1.1524 will signal a resumption of the downtrend.

The minor trend is upward. This generates a bullish momentum. A trade up to 1.1669 will indicate the buy is strengthening. A move through 1.1572 will change the minor downtrend.

Based on the close at 1.1644, support is a series of 50% levels at 1.1640, 1.1621 and 1.1597.

The primary range is 1.1909 to 1.1524. Its retracement area at 1.1717 to 1.1762 is the next potential bullish and resistance target.

For an overview of all of today’s economic events, check out our economic calendar.

This article originally appeared on FX Empire

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