2016-08-24 11:29:14

Technical performance:

Prev. closure: 1.1306; Daily range: 1.1288-1.1312;
Opening: 1.1306; 52-week range: 1.0538-1.1616;
Annual profit: -2.76%; Previous day's change (%): -0.11.

Analytical review:

  • The single European currency has grown by over 250 points against the US dollar since early August. At yesterday's trading session the currency pair held on to a resistance level of 1.1350, which triggered market correction.
  • Important statistics on the US and EU economy were released yesterday. The German PMI dropped in August to 53.6 against a previous value of 53.8, Markit Economics reports. However, the indicator exceeded market expectations of 53.5;
  • According to the Census Bureau, new home sales edged up 12.4% to 654,000 in July. Analysts predicted a value of 580,000.
  • The Commitments of Traders' report registered a majority of short positions with huge market participants. There have been opened 197,208 short positions as compared with 91,471 long contracts.
  • A news factor is worth attention this week: Ifo's business climate index (to be published on Thursday) and FED's Yellen statement (Friday). These events may affect market volatility.

Summary:

  • Ambiguous stats on the German economy and positive macroeconomic data from the USA put pressure on the euro. COT data prove a considerable majority of short positions with huge market participants.
  • We therefore expect that EUR/USD will undergo correction in the nearest future. We advise you to search for market entry points to open short positions.

Trading tips for EUR/USD

Key levels:
Support levels: 1.1285, 1.1245, 1.1205
Resistance levels: 1.1350

Medium-term trading, H1
The currency is currently trading near a support level at 1.1285. Once this level is broken and tested and relevant confirming signals appear (Price Action patterns, for example), we recommend searching for market entry points to open short positions. Risk per trade: no more than 2% of equity. Stop order shall be placed a bit above the signal line. We recommend that prospective profits should be fixed partly at the levels of 1.1250, 1.1210 and 1.1165, with Trailing Stop applied.

Medium-term trading, H1
Medium-term trading, H1

Short-term trading, M15
The currency is trading at 1.1290-1.1315. We advise you to search for market entry points once this zone is broken and tested. Positions shall be opened in the direction of the signal line and the nearest support/resistance level. Risk per trade: no more than 3% of equity. Stop order shall be placed a bit above/below the signal line. Prospective profits shall be fixed partly, at 50%, 30%, and 20% of a prospective fluctuation, with Trailing Stop applied.

Short-term trading, M15
Short-term trading, M15