Current trend

Last week, demand for the US currency was growing amid a hike in US interest rates. However, on Friday, market sentiment changed, and the European currency started strengthening against the US Dollar.

At the beginning of this week, the pair kept on growing while traders were taking profits on large volumes of short positions. Moreover, the European currency gained support from Germany’s macroeconomic releases. Producer Price Index confirmed the forecast of 0.2%; Consumer Confidence came in at 9.4 points, 0.1 above the forecast.

Today, attention needs to be paid to GDP data for the third quarter, due in the US.

Support and resistance

At present, the pair is likely to decline within a descending channel towards the level of 1.0560 (March lows). Otherwise, the pair might strengthen to the level of 1.0960 the breakout of which would lead to a growth towards new highs.

The US Dollar is strongly overbought and has to get support from fundamental factors to continue its growth. At the same time, demand for risky assets is increasing, and macroeconomic releases indicate economic situation in the eurozone is getting stable.

Support levels: 1.0855, 1.0775, 1.0710, 1.0690, 1.0650 1.0600, 1.0570, 1.0525, 1.0460, 1.0410.

Resistance levels: 1.0960, 1.1040, 1.1075, 1.1200, 1.1255, 1.1320, 1.1385, 1.1450, 1.1540, 1.1600.

Trading tips

Short positions can be opened from the current level with targets at 1.0600, 1.0560 and stop-loss at 1.0990.

Pending buy orders can be placed above the level of 1.1000 with the target at 1.1200.

EUR/USD: demand for USD declines

Materials published on this page are provided by LiteForex for informational purposes only and should not be construed as investment advice or advice for the purposes of 2004/39/EC Directive. In addition, these materials have not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the further distribution of investment research.

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