Yesterday the pair continued falling amid strengthening US Dollar.
The USD was supported by growing tensions in the Middle East where a crisis between Saudi Arabia and Iran is developing, and by poor macroeconomic statistics from the eurozone. According to preliminary data, the Core Consumer Price Index for December grew by 0.8%, which was 0.1% worse than experts forecasted.
Additional pressure on the pair came from the GDT Price Index published in New Zealand, which in December fell by 1.6%.
Support and resistance
Bollinger Bands on the daily chart is turning down while the price range is widening. At the same time, the indicator formed a signal for correctional growth as the price has left the lower border of the range. MACD continues downward trend. Stochastic is approaching the oversold zone indicating a possibility of the upward correction.
The indicators recommend waiting for clearer trading signals.
Support levels: 0.6660 (local low), 0.6600 (9 December low), 0.6560, 0.6534, 0.6500, 0.6457, 0.6428 (18 November low).
Resistance levels: 0.6690 (local high), 0.6724, 0.6787, 0.6835, 0.6865 (31 December high), 0.6882 (29 December high), 0.6900.
Open short positions from current prices with the target at 0.6415 and stop-loss at 0.6700. Validity – 2-3 days.
Long positions can be opened after the breakout of the level of 0.6700 with the target at 0.6790 and stop-loss at 0.6670. Validity – 2-3 days.