Current trend

EUR/USD dropped to a level of 1.0890 on Tuesday after publication of positive economic statistics for the USA. The consumer price index reached a level of 0.2% month-on-month, amounting to 0.0% year-on-year. Core consumer price index excluding food and energy prices also reached a level of 0.2% month-on-month instead of the expected 0.1%, and 1.7% year-on-year, instead of 1.6%. New homes sales grew by 539 thousand exceeding experts' expectations as well.

The American currency was supported additionally by the statements of John C. Williams, President of the Federal Reserve Bank of San Francisco. In his opinion, the issue of interest rates rise should be addressed during summer.  These are earlier-than-expected dates.

Support and resistance

The resistance levels are 1.1028 (Tuesday's maximum), 1.1116 (maximum on 5th March), 1.1230 (upper line of Bollinger bands).

Support levels: 1.0900 (minimum of the Asian session), 1.0810 (38,2% Fibonacci retracement level, the middle line of the Bollinger bands indicator), 1.0750 (50.0% Fibonacci retracement level), 1.0600 (important psychological level).

Trading tips

Sell with the first target at 1.0810 and second target at 1.0750 after a level of 1.0890 is broken.   Buy from a level of 1.1030 with targets at 1.1110 and 1.1200.

EUR/USD: analysis and forecast

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