The pair is consolidating in a sloping descending channel, despite a significant strengthening in the USD against majority of other currencies. That indicates that economic conditions in the eurozone are improving.
The pair was pressured by strong US labour market data that came out on Friday. However, as the Dollar is overbought, negative macroeconomic data from the US could decrease demand for the USD and increase demand for risky assets.
This week attention needs to be paid to data on Retail Sales, Industrial Production and Jobless Claims from the US. Today, due to the absence of important macroeconomic publications low volatility is expected on the market.
Support and resistance
Most likely, today the pair will continue trading within a narrow sideways range between the levels of 1.0900 and 1.0825.
At the same time, a breakout of the level of 1.0985 would open a way towards 1.1200.
Support levels: 1.0855, 1.0825, 1.0775, 1.0710, 1.0690, 1.0650, 1.0600, 1.0600, 1.0570, 1.0527.
Resistance levels: 1.0900, 1.0985, 1.1040, 1.1075, 1.1135, 1.1165, 1.1200, 1.1255, 1.1320.
Short positions can be opened from current prices with the target at 1.0525 and stop-loss at 1.0995.
Pending buy orders can be placed above the level of 1.1000 with the target at 1.1200.