EUR/USD: sideways consolidation and downward momentum

Current trend

The EUR/USD pair continues to trade within the side consolidation. Last week, the instrument was supported by the drop in demand for USD to the closing of profitable short positions at local lows. However, the US fundamental background is strong, which positively affects the currency. Today the pair reached the upper border of the sideways narrowing channel and rushed down, which indicates the restoration of investment interest in the dollar.

On Monday, it is necessary to pay attention to EU Consumer Confidence release. The traders are focused on key indices publication, ECB decision and press conference of the head of the ECB. In the US, Q2 data on the growth rates of the economy, the main indices and Durable Goods Orders are expected.

Support and resistance

The downward trend will continue despite a significant correction of the pair. Demand for the dollar will continue to grow due to the acceleration of the US economy, which is supported by strong releases in the main sectors of the economy. Technically, the trend remains downwards, and after some correction, it will intensify, which will let the price renew local lows in the medium term. Technical indicators confirm the forecast for further decline, MACD short positions’ volumes are high, Bollinger bands are directed downward.

Resistance levels: 1.1715, 1.1775, 1.1820, 1.1830, 1.1880, 1.1900, 1.1950.

Support levels: 1.1690, 1.1665, 1.1600, 1.1575, 1.1510, 1.1500, 1.1430.

Trading tips

It is relevant to increase the volumes of short positions from the current level with the targets at 1.1600, 1.1510, 1.1500 and stop loss 1.1780.

Euro vs US Dollar

Buy Sell Spread
1.16993 1.16972 21

Scenario

Timeframe Weekly
Recommendations SELL
Entry Point 1.1713
Take Profit 1.1600, 1.1510, 1.1500
Stop Loss 1.1780
Support levels 1.1430, 1.1500, 1.1510, 1.1575, 1.1600, 1.1665, 1.1690, 1.1715, 1.1775, 1.1820, 1.1830, 1.1880, 1.1900, 1.1950

EUR/USD: sideways consolidation and downward momentum

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