On Thursday, the European currency managed to strengthen against the US dollar and the British pound, stepping up from its local lows.
The previous day, the USD showed a strong growth when the results of the Fed meeting were released. However, on Thursday, a correction started in major pairs amid US weak macroeconomic statistics. Moreover, the GBP gained support from Consumer Credit data, while the EUR strengthened after Germany released strong Consumer Price Index.
According to preliminary data, Germany's Consumer Price Index in October grew by 0.3% from a year earlier, against the previous 0.0% and the forecast of 0.2%. On a monthly basis, the indicator remained at the same level, which was above the expectations as well.
Support and resistance
Bollinger Bands indicator on the daily chart is still declining, while the price range is narrowing down. MACD is trying to turn up, but keeping its sell signal. Stochastic is in the oversold zone and trying to start growing.
It is recommended to wait for clearer trading signals.
Support levels: 0.7142 (29 October low), 0.7100, 0.7079, 0.7038, 0.7015.
Resistance levels: 0.7191 (29 October high), 0.7223, 0.7249 (28 October high), 0.7275, 0.7302, 0.7332, 0.7359.
Short positions can be opened after the breakdown of the level of 0.7150 (with appropriate indicators signals) with target at 0.7030 and stop-loss at 0.7180. Validity - 1-3 days.
In case of an upward correction and the breakout of the level of 0.7190, long positions can be opened with targets at 0.7280, 0.7300 and stop-loss at 0.7160. Validity - 2-3 days.