After yesterday’s growth of the American and Chinese stock indices, today the fall continued. ChiNext fell by 2.9%, Shanghai Composite by 3.6%, and Nikkei Stock Average by 0.5%. The European indices are falling as well, thus supporting the Euro.
At present, investors prefer switching their funds into safe-haven assets, such as the Yen and gold.
Today attention needs to be paid to data on Retail Sales, Producer Price Index and Industrial Production for December in the US, and to the Michigan/Reuters Consumer Confidence for January.
Support and resistance
The pair is moving along an ascending channel on the daily chart with the upper border near the level of 1.1285 (23.6% Fibonacci correction).
Pair’s growth is restricted by strong resistance levels at 1.0900 (ЕМА50), 1.0975, 1.1030 (ЕМА144), 1.1130 (ЕМА200 on the daily chart). At the same time, a breakdown of the trend line at the level of 1.0865 would accelerate pair’s fall.
However, most likely the price will remain near the level of 1.0900 until 21 January when the next ECB monetary policy meeting is due.
OsMA and Stochastic do not give clear trading signals.
Support levels: 1.0865, 1.0800, 1.0760, 1.0700, 1.0600, 1.0560.
Resistance levels: 1.0900, 1.0975, 1.1000, 1.1030, 1.1130, 1.1285.
Short positions can be opened below the level of 1.0860 with targets at 1.0810, 1.0750, 1.0710 and stop-loss at 1.0890.
Long positions can be opened above the level of 1.0910 with targets at 1.0975, 1.1020, 1.1080 and stop-loss at 1.0880.