Considerable growth of the European currency against USD that indicated the movement of the pair out of the 2-year-long side tendency cannot be considered finished. In the beginning of August the pair reached the new local maximum of 1.1900 after which moved to the side consolidation stage. Additional pressure on the US currency is put by the negative fundamental background and main releases show downward dynamics. Last trading week the pair slightly corrected downward due to the issue of positive releases on labor market. In the beginning of the current week no important releases were published, and the pair consolidated in the narrow side channel. Key data on inflation and other indexes are due in the end of the week.
Support and resistance
In the short-term the pair will continue to trade in the narrowing side channel, after which it may transfer to formation of the downward tendency with target at 1.1600. In the first part of the trading week positions may be opened from the borders of the channel. Technical indicators on the H4 chart start to reverse. MACD indicates rapid fall of volumes of long positions, and Bollinger Bands are reversing downwards.
Support levels: 1.1800, 1.1730, 1.1650, 1.1600, 1.1575, 1.1500, 1.1430.
Resistance levels: 1.1860, 1.1900, 1.1985, 1.2050, 1.2100, 1.2170.
In the short-term short pending orders should be opened from the level of 1.1860 with target at 1.1765. Stop-loss may be placed at 1.1930.