European indexes are declining since the opening of the European session, Stoxx Europe 600 reduced by 0.2%. The EUR/USD negative dynamics is caused by weak economic growth and low inflation, low interest rates, EU loose monetary policy, ECB bond purchase program, as well as Fed’s intention to raise interest rates.
On Friday attention needs to be paid to Markit EU Services PMI for July, due at 11:00 a.m. (GMT +3), US Manufacturing PMI for July, due at 4:45 p.m., US New Home Sales for June, due at 5:00 p.m.
Support and resistance
The pair continues declining towards 1.0480 (2015 low).
On the 4-hour chart OsMA and Stochastic indicator give buy signals; on the daily chart they are in the sell zone.
As there are no important publications affecting the euro this week, a short-term strengthening correction towards 1.0870, 1.0900, 1.0935 is possible. But on the whole, the decline continues in the medium term. Fundamental factors favor short positions.
Support levels: 1.0810, 1.0720, 1.0570.
Resistance levels: 1.0900, 1.1000, 1.1050, 1.1100, 1.1135, 1.1180.
Open short positions from current levels and from 1.0870, 1.0900, 1.0930 with targets at 1.0800, 1.0700, 1.0600 and stop-loss at 1.0960.
Alternative long positions are worth considering only after the breakout of 1.1050. In this case a rise towards 1.1290 is possible.