Long-term correction of EUR against USD in early February was replaced by a new upward wave. It is worth noting that the upward momentum of the pair is very strong: it shows rapid growth without serious downward correction and for the current trading week gained more than 300 points.
Today, the euro against the dollar overcame the January local highs of 1.2520, 1.2535 and tested a new peak of 1.2555. However, after that, the pair reversed and quickly descended to the key support level of 1.2500.
Today, no important macroeconomic releases are expected for the Eurozone, therefore, the pair will be traded under the influence of investor sentiment. Due to that EUR could sink after a sharp increase because of the fixation of a large volume of long positions at the peak. During the second half of the day, there will be data on the construction sector and consumer sentiment index in the US.
Support and resistance
Today’s US data are not key, and therefore they should not significantly affect the trend, which remains ascending, even though the pair failed to consolidate above 1.2535. A narrow ascending channel with medium-term target levels of 1.2585, 1.2700 is expected to form. An alternative scenario can be considered a transition to side consolidation or a deeper correction to the levels of 1.2430, 1.2400 with subsequent growth.
The outlook for growth remains, as indicated by trade sentiment and technical indicators: MACD indicates the preservation of the high volume of long positions, and Bollinger Bands are still directed upwards.
Support levels: 1.2500, 1.2430, 1.2400, 1.2360, 1.2330, 1.2280, 1.2250.
Resistance levels: 1.2535, 1.2555, 1.2585, 1.2640, 1.2700.
In this situation, long positions may be opened from the current level with targets at 1.2585, 1.2700 and stop-loss at 1.2370.
Euro vs US Dollar
|Take Profit||1.2585, 1.2700|
|Support levels||1.2250, 1.2280, 1.2330, 1.2360, 1.2400, 1.2430, 1.2500, 1.2535, 1.2555, 1.2585, 1.2640, 1.2700|
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