Today the EUR/USD pair opened with a gap down but later recovered some of the losses.
The pair is pressured by weekend events in Paris and the approaching ECB meeting where the regulator is going to consider whether to expand its current stimulus program. Despite continuous attempts by the ECB inflation in the eurozone remains near zero, while its target stands at just below 2%.
Today attention needs to be paid to data on the Consumer Price Indices for October in the eurozone that might grow by 0.1% against the previous month but remain unchanged at 0% against the previous year. In addition, investors are waiting for the ECB President Draghi speech, in which he can confirm regulator’s plans on the QE program expansion.
Support and resistance
On the weekly chart, the pair remains near the lower border of an ascending channel at the level of 1.0750. At the same time, on the daily chart the pair is moving along a descending channel with its lower border near the level of 1.0600 and the target at 1.0500 (year lows).
A correctional growth in the pair might continue to the levels of 1.0800 (ЕМА50 and upper border of an ascending channel on the 4-hour chart), 1.0820, 1.0860 (May and July lows).
On the 4-hour, weekly and monthly charts OsMA and Stochastic give sell signals, while on the daily chart they start turning to purchases.
Support levels: 1.0695, 1.0650, 1.0600, 1.0500.
Resistance levels: 1.0800, 1.0820, 1.0860, 1.1050, 1.1180, 1.1285.
Short positions can be opened below the level of 1.0700 with the target at 1.0630 and stop-loss at 1.0740.
Long positions can be opened after the breakout of the level of 1.0800 with targets at 1.0890, 1.0950 and stop-loss at 1.0770.