Today the pair continues to reduce under the influence of weak European statistics. Retail sales in Germany dropped by 1.2% MoM and 1.4% YoY in October. Investors were mostly negative about initial November data on Eurozone inflation. The values failed to reach outlook levels: CPI made up 1.5% (instead of the expected 1.6%), and the basic value of the index remained unchanged and made up 0.9%. Therefore, despite the growth of Eurozone economy, inflation continues to lag back reducing the possibility of material monetary policy tightening by ECB.
During the day the market also waited for the release of October statistics on personal spending in the USA. The indicator is expected to grow which may support further strengthening of the US currency.
Support and resistance
Right now the pair is trading around the level of 1.1840 (Murrey [1/8]) and in case it is broken through may continue to be corrected to 1.1750 (middle line of Bollinger Bands) and 1.1718 (Murrey [0/8]). Otherwise the price may resume growth to 1.1962 (Murrey [2/8]) and further to August maximums at 1.2085 (Murrey [3/8]). Right now the continuation of the fall seems more likely as Stochastic is directed downwards.
Support levels: 1.1750, 1.1596.
Resistance levels: 1.1962, 1.2085.
In the current situation sell positions should be opened below the level of 1.1840 with targets at 1.1750, 1.1718 and stop-loss at 1.1860.
Buy positions should be opened from the level of 1.1880 with targets at 1.1962, 1.2085 and stop-loss at 1.1840.