Today the pair is strengthening amid growing tensions in the Middle East where Saudi Arabia broke off all diplomatic ties with Iran on Sunday. Currently investors switch their funds into safe-haven currencies, such as the Franc and the Yen.
In addition, the US Dollar was pressured by poor data from China where the Caixin Manufacturing PMI fell to 48.2 points, while economists forecasted a growth to 49.0 points.
Support and resistance
Bollinger Bands on the daily chart is moving down while the price range remains narrow. MACD is slowly falling and giving a weak sell signal. Stochastic is near the oversold zone and slowing its fall.
The indicators recommend waiting for clearer trading signals.
Support levels: 1.0867 (local low), 1.0795 (7 December low), 1.0762, 1.0706, 1.0673, 1.0638.
Resistance levels: 1.0900 (local high), 1.1000 (16 December high), 1.1059 (15 December high), 1.1100.
Long positions can be opened after the price consolidation above the level of 1.0900 with the target at 1.1000 and stop-loss at 1.0850. Validity – 1-2 days.
Short positions can be opened after the breakdown of the level of 1.0850 with the target at 1.0700 and stop-loss at 1.0920. Validity – 2-3 days.