EUR/USD: euro remains under pressure

Current trend

On Friday, the EUR/USD pair moderately declined, returning to previous local lows of September 17. The development of negative dynamics was due to the poor macroeconomic statistics from Europe. Germany's Producer Price Index fell by 0.5% MoM for August after rising by 0.1% MoM for the previous month. Analysts expected a decline of 0.2% MoM. The index growth slowed down from +1.1% YoY to +0.3% YoY, which also turned out to be worse than the forecast of +0.6% YoY. Preliminary data on Consumer Confidence in the EU also did not provide significant support for EUR. For September, the indicator slightly increased from –7.1 to –6.5 points, which turned out to be better than expectations of –7.0 points.

During today's Asian session, the pair is growing, being influenced by technical factors. Investors are awaiting the publication of Markit PMI in Europe for September.

Support and resistance

On the daily chart, Bollinger bands are moving flat. The price range is trying to consolidate within a rather narrow framework, indicating ambiguous trading in the short term. The MACD indicator falls, keeping a poor sell signal (the histogram is below the signal line). Stochastic is declining, quickly approaching its lows, indicating that EUR is oversold in the ultra-short term.

It is better to keep the current short positions until the market situation becomes clear.

Resistance levels: 1.1028, 1.1050, 1.1074, 1.1100.

Support levels: 1.1000, 1.0962, 1.0924, 1.0900.

Trading tips

Long positions can be opened after the breakout of the levels of 1.1028–1.1050 with the target at 1.1100 or 1.1133. Stop loss – 1.1020–1.1000.

Short positions can be opened after the breakdown of the level of 1.1000 with the targets at 1.0924–1.0900. Stop loss – 1.1040.

Implementation period: 2–3 days.

Scenario

  • Timeframe

    Intraday

  • Recommendation

    BUY STOP

  • Entry Point

    1.1035, 1.1055

  • Take Profit

    1.1100, 1.1133

  • Stop Loss

    1.1000

  • Key Levels

    1.0900, 1.0924, 1.0962, 1.1000, 1.1028, 1.1050, 1.1074, 1.1100

Alternative scenario

  • Timeframe

    Intraday

  • Recommendation

    SELL STOP

  • Entry Point

    1.0995

  • Take Profit

    1.0924, 1.0900

  • Stop Loss

    1.1040

  • Key Levels

    1.0900, 1.0924, 1.0962, 1.1000, 1.1028, 1.1050, 1.1074, 1.1100