Review and dynamics
On Wednesday the pair EUR/USD has grown by nearly 1.0%, up to the level of 1.1300 (Fibonacci 23.6% after the last wave of decline from the highs of 2014) after the announcement of the victory of Trump. However soon after that the pair began to decline and closed the day below the level of 1.0910. On Wednesday volatility in the pair EUR/USD reached nearly 400 points. Yesterday and today, the USD continues to rise in the currency market against safe-haven assets and in the pair EUR/USD. The pair has reached the lows of last month at the level of 1.0860.
On the hourly, 4-hour, daily, weekly and monthly charts the indicators OsMA and Stochastic give sell signals, indicating strong downward momentum.
However, at the end of the trading week investors should be very careful when opening short positions on the pair. It is highly probability that correction will develop because of the closing of long positions on the USD. In this regard, it is worth paying attention to the pairs USD/JPY and USD/CHF, in which the USD is declining.
In case of the correction, the targets will be at the levels of 1.0910 (lows after Brexit referendum) and 1.0990 (ЕМА200 on the hourly chart). Breakout of the level of 1.1030 (ЕМА200 on 4-hour chart) may trigger upward correction to the line of balance at the level of 1.1135. Breakout of the level of 1.1135 (ЕМА200 on the daily chart, ЕМА50 on the weekly chart) may trigger further growth in the pair EUR/USD up to the level of 1.1285 (Fibonacci 23.6% after the last wave of decline from the highs of 2014).
However, pressure on the pair EUR/USD will continue; the pair is in the descending channel on the daily chart with the limits near the levels of 1.0855 and 1.0825. If these limits are broken down, next targets can be at the levels of 1.0800, 1.0710 and 1.0600.
Support levels: 1.0855, 1.0825, 1.0710 and 1.0600.
Resistance levels: 1.0910, 1.0990, 1.1030, 1.1050 and 1.1135.
Sell Stop: 1.0860. Stop-Loss: 1.0925. Targets: 1.0825, 1.0710 and 1.0600.
Buy Stop: 1.0925. Stop-Loss: 1.0880. Targets: 1.0990, 1.1030, 1.1050 and 1.1135.
Strong downward impetus
Indicators suggest upward correction and further rise