Review and dynamics
Due to the rise in the USD in May, pair EUR/USD broke down important support level of 1.1180 on the daily chart. (See "EUR/USD: Technical analysis as of 20/05/201 breakout of the level of 1.1180 is required”).
The dollar significantly strengthened in May against safe-haven assets, such as the Yen, Franc and gold. However, there are signs, that the USD will either reverse or profit taking on long positions on the USD may take place.
Currently, investors are waiting for the speech of the US Fed Chairman, Janet Yellen on Friday (16:30 GMT+2). It is known the Mrs Yellen adheres to restrained position in terms of the interest rate increase.
After reaching the monthly lows at the level of 1.1130 yesterday, the pair EUR/USD has been growing today returning to the broken out support level of 1.1180 (ЕМА144, ЕМА200 on the daily chart).
Breakout may turn out to be false. Today, American statistics will be released at 14:30 (GMT+2). In case of the weak data the USD will continue yesterday’s decline. The pair EUR/USD will return to the zone above the level of 1.1180 and investors’ will wait for the speech by Janet Yellen.
In case of the positive American statistics, and indications of the interest rate increase at the meeting in June in the Mrs. Yellen’s speech, the USD will strengthen in the market and in the pair EUR/USD.
Breakout of the level of 1.1050 (lower line of the ascending channel on the weekly chart) will trigger further decline in price to support levels of 1.0870 and 1.0750.
As an alternative scenario the pair EUR/USD may grow to resistance levels of1 .1285 (Fibonacci 23.6%), 1.1300 (ЕМА200, ЕМА144 on 4-hour chart and psychological level) and further up to 1.1485 (highs of October 2015), 1.1615, 1.1700, 1.1785 (Fibonacci 38.2%), 1.1900 (ЕМА144 on the weekly chart).
On the weekly, and daily charts the indicators OsMA and Stochastic give signals for short positions, on 4-hour chart the indicators suggest to open long positions.
Support levels: 1.1100 and 1.1050.
Resistance levels: 1.1180, 1.1230, 1.1285, 1.1300, 1.1335, 1.1400, 1.1485, 1.1535 and 1.1615.
Sell Stop: 1.1140. Stop-Loss: 1.1180. Targets: 1.1100, 1.1000, 1.0900 and 1.0800.
Buy Stop: 1.1210. Stop-Loss: 1.1170. Targets: 1.1285, 1.1300, 1.1400, 1.1485, 1.1500 and 1.1600.
The pair will return to 1.1180
Indicators suggest to open sell positions