After the test of the lower border of the long term upward channel at the level of 1.1660 European currency got an upward momentum against dollar again. The main catalyst of the pair’s growth is the decrease of the investors’ interest in the USD. Despite the positive commentaries and the further perspectives of the US economy development in the yesterday’s FOMC Minutes, dollar is falling against the main currencies. The pressure on the US currency is probably due to the doubt of the Fed’s official upon the further monetary policy tightening this year.
Today the pair was insignificantly corrected due to the negative Consumer Price Index publication in France, but after the release of strong EU industrial production data the currency went upwards again. In the end of the week the traders should pay attention to the US inflation and retail sales data, and the German inflation pressure publication.
Support and resistance
In the middle term the development of the current upward momentum due to the growth of investment attractiveness of the euro is expected. On the other hand, in the USA inflation data will meet the positive forecast, the confidence in dollar will significantly grow, but the negative data will affect the USD stronger: dollar will be significantly weakened.
Technically the pair is in the long term upward range, and if it breaks the strong resistance levels of 1.1880, 1.1900, it can test the highs of the end of August and the beginning of September at the levels of 1.2065, 1.2100. Technically indices confirms the growth perspectives, on the 4-hour chart MACD reflects the rapid growth of long positions volumes, and the pair has crossed the middle line of Bollinger Bands on the daily chart, and the upper border is the possible target and a strong resistance at the level of 1.2000.
Resistance levels: 1.1880, 1.1900, 1.1925, 1.2000, 1.2030, 1.2120, 1.2150, 1.2175, 1.3100.
Support levels: 1.1830, 1.1800, 1.1730, 1.1715, 1.1665, 1.1600, 1.1575.
It’s relevant to increase the volume of long positions at the current level within the upward trend with the target at 1.2100, stop loss is 1.1800.