EUR/USD: consolidation before the fall

Current trend

USD is growing against the main currencies, including EUR. After the upward correction last week, the pair EUR/USD went down again. Over the past three days, it has lost more than 150 points and has practically reached a local minimum and a key support level of 1.1510 after the publication of negative German and French key indices and the growth in demand for USD.

Investment interest in the dollar is growing despite the poor US Consumer Confidence Index and Durable Goods Orders releases. Only the employment market supported USD.

Today and on Friday, key statistics, which can strengthen USD potential, will be released in the US: Initial Jobless Claims and the economic growth rate.

Support and resistance

The trend stays downwards. Most likely, the pair will continue to decline but before, it can consolidate within the narrowing channel of 1.1510–1.1665. A sharp fall from the current level in case of the publication of positive US data is less likely. The main scenario is the growth from the minimum at 1.1510 to the levels of 1.1600, 1.1665 and the formation of a new downward wave with the target at 1.1430 (the strongest support level). Technical indicators confirm the forecast, MACD short positions volumes are growing, Bollinger bands are directed downwards, gradually reversing horizontally.

Resistance levels: 1.1600, 1.1665, 1.1715, 1.1730, 1.1775, 1.1800, 1.1830.

Support levels: 1.1510, 1.1500, 1.1430, 1.1370, 1.1320, 1.1250, 1.1200.

Trading tips

It is relevant to increase the volumes of short positions from the current level and open pending short positions from 1.1600, 1.1665 with the target at 1.1430, in the medium term – with the targets below 1.1320, 1.1250. Stop loss is 1.1740.

Euro vs US Dollar

Buy Sell Spread
1.15885 1.15865 20

Scenario

Timeframe Weekly
Recommendations SELL
Entry Point 1.1592
Take Profit 1.1430
Stop Loss 1.1740
Support levels 1.1200, 1.1250, 1.1320, 1.1370, 1.1430, 1.1500, 1.1510, 1.1600, 1.1665, 1.1715, 1.1730, 1.1775, 1.1800, 1.1830

Alternative scenario

Recommendations SELL LIMIT
Entry Point 1.1600, 1.1665
Take Profit 1.1320, 1.1250
Stop Loss 1.1740
Support levels 1.1200, 1.1250, 1.1320, 1.1370, 1.1430, 1.1500, 1.1510, 1.1600, 1.1665, 1.1715, 1.1730, 1.1775, 1.1800, 1.1830

EUR/USD: consolidation before the fall

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