EUR/USD Report: The potential of a breakout is increased by an inventory adjustment process near the important resistance level of 1.0100.

VOT Research Desk

Below the important threshold of 1.0100, the EURUSD pair is exhibiting choppy movements inside a constrained range.

As investors wait for the publication of US inflation statistics to make future judgments, the asset has moved sideways. The US dollar index has fallen victim to the calm market environment (DXY).

The DXY is fluctuating between 109.47 and 109.79, and it is anticipated that it will continue to perform poorly until the results of the US midterm elections and inflation data.

The asset has changed into a rangebound structure on an hourly scale, which denotes an inventory adjustment phase for a vertical motion. The likelihood of a rebound following an inventory adjustment break is favourable because the preceding trend stayed north-side.

The upward filters are strengthened by the 20- and 50-EMAs at 1.0056 and 1.0014, respectively.

The Relative Strength Index (RSI) (14) has been pulled around 60.00 as a result of the asset’s corrective move, but the positive bias is still present. Mild corrections are seen as healthy after examining the possible resistance because breakouts are not always easy.

An ideal time to purchase would be at or around the 20-EMA at 1.0056, which would push the asset in the direction of the round-level resistance at 1.0100 and the high of September 23 at or near 1.0200.

On the other hand, if the asset falls below Tuesday’s low at 0.9971, the Euro bulls may lose momentum. If the same thing happens, the dollar bulls will surge down into Monday’s low of 0.9900 and November 1’s low of 0.9853.