The European currency against USD dollar remains in the side consolidation stage in the long term despite its wide channel. Euro had been consolidating against USD until the end of November due to the fall of demand for the US currency. However, dollar was strengthened by positive data on the main sectors of the US economy, namely strong December releases on the labor market, inflation, key indexes, and industrial output.
Right now the pair is trading in the wide downward channel. Today it received support from positive data on key Eurozone indexes. The upward impulse is likely to remain today due to the absence of key released from the USA. A set of data is expected from Germany on Tuesday and Wednesday and may give the pair dynamics. The main macroeconomic releases for the USA (final GDP and labor market data) are due at the end of the week.
Support and resistance
The downward trend is likely to remain until the end of the year in view of growing demand for USD after the Fed’s decision to increase the interest rate and in view of positive fundamental background. The pair may gradually go down to 1.1600, but before that it should break through the strong support level of 1.1690.
Technically, the pair remain in the medium term downward channel increasing pressure on the European currency. Indicators fail to show direction: MACD in the D1 chart is near the zero mark, and Bollinger Bands have reversed horizontally. Therefore, an alternative scenario will be the consolidation of the pair within the wide side channel.
Support levels: 1.1730, 1.1715, 1.1690, 1.1665, 1.1600, 1.1575, 1.1530, 1.1500, 1.1470.
Resistance levels: 1.1785, 1.1800, 1.1830, 1.1860, 1.1900, 1.1925, 1.1980, 1.2030.
Short positions may be opened from the current level with target at 1.1600 and stop-loss at 1.1870.
Euro vs US Dollar
|Support levels||1.1470, 1.1500, 1.1530, 1.1575, 1.1785, 1.1690, 1.1715, 1.1730, 1.1800, 1.1830, 1.1860, 1.1900, 1.1925, 1.1980, 1.2030|
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