Review and dynamics
Last week the pair EUR/USD significantly dropped, breaking down important support levels of 1.1185 (ЕМА200 on the daily chart) and 1.1120 (lower limit of the range between the levels of 1.1285 ( Fibonacci 23.6% after the decline from the highs of 2014) and 1.1120 (lows of September)). The lower limit of the other broader range between the levels 1.1045 (lows of August) and 1.1350 (highs of August) was broken at the level of 1.1045.
Support level of the pair EUR/USD is 1.0975 (the lows of July). The pair remains under pressure.
On the weekly chart a new descending channel has been formed with the lower limit below the level of 1.0710 (annual lows).
On the daily and weekly charts the indicators OsMA and Stochastic give sell signals; on the monthly chart the indicators also give signals for short positions.
However, on the hourly and 4-hour charts the indicators have reversed toward the long positions, showing probability of the correction with the target of 1.1045.
In case of the alternative scenario the pair EUR/USD may go back to the range above the levels of 1.1045 and 1.1120.
However, the decline in the pair is more likely. The difference in the monetary policies of the US Fed and the ECB will put pressure on EUR/USD in the medium term.
Support levels: 1.0975, 1.0915, 1.0825 and 1.0710.
Resistance levels: 1.1045, 1.1120, 1.1185, 1.1205 and 1.1285.
Sell Stop: 1.0960. Stop-Loss: 1.1010. Targets: 1.0975, 1.0915, 1.0825 and 1.0710.
Buy Stop: 1.1020. Stop-Loss: 1.0960. Targets: 1.1045, 1.1120, 1.1185 and 1.1205.
Breakout of important support levels
Indicators give signals for the short-term buy positions as part of the correction