EUR/USD: Recommendations

Despite today's and yesterday's corrective growth amid a weakening dollar, the EUR/USD remains under pressure, trading in downward channels on the daily and weekly charts.

The lower border of the descending channel on the weekly chart passes through the mark of 1.1000, and on the daily chart – near the mark of 1.0900.

Nevertheless, on the 1-hour chart EUR / USD broke through the resistance level of 1.1030 (ЕМА200) and continues to develop upward trend towards the resistance levels of 1.1100 (ЕМА200 on the 4-hour chart), 1.1130 (ЕМА50 and the upper border of the downward channel on the daily chart).

The OsMA and Stochastic indicators on the 4-hour, daily, and weekly charts turned to long positions, recommending purchases.

Nevertheless, growth above resistance levels 1.1110, 1.1130 is unlikely.

Below resistance levels of 1.1270 (ЕМА200 on the daily chart), 1.1285 (Fibonacci level 23.6% of the correction to the fall from the level of 1.3900, which began in May 2014), 1.1225 (ЕМА144 on the daily chart) is dominated by long-term negative dynamics.

The closest targets in case of resumption of EUR / USD decline will be levels 1.1000, 1.0960, 1.0940.

A signal to resume purchases will be a breakdown of the short-term support level of 1.1030 (ЕМА200 on the 1-hour chart).

Expectations of further easing of the monetary policy of the ECB put pressure on the euro and the pair EUR / USD.

Speaking on Wednesday at the European Parliament, Kristin Lagarde, who will be the next president of the European Central Bank, said that the ECB’s monetary policy stimulus measures continue to have a beneficial effect on the Eurozone economy (Lagarde will replace Draghi as president of the ECB on November 1).

“The Eurozone economy has faced some short-term risks, mainly related to external factors, while inflation stubbornly remains below the target level set by the ECB”, she said. “Thus, I agree with the ECB Governing Council that stimulating monetary credit policy will remain appropriate for a long period of time”.

Of the news for today, we are awaiting publication in the period from 12:15 to 14:00 (GMT) of a block of important macro statistics for the United States. Although there is usually no direct correlation with Non-Farm Payrolls, the ADP report is considered a harbinger of the official report of the US Department of Labor on the general state of the labor market in the country. Strong data has a positive effect on the dollar. An increase of 149,000 in the number of workers in the US private sector is expected (up from +156,000 in July). A decrease in the result may negatively affect the dollar.

The business activity index (PMI) in the service sector measures the state of the service sector in the US economy. A relative decrease in the indicator or data worse than forecast (54.0 in August against 53.7 in July) may have a short-term negative impact on the dollar.

Support Levels: 1.1030, 1.1000, 1.0960, 1.0940

Resistance Levels: 1.1085, 1.1110, 1.1130, 1.1200, 1.1225, 1.1270, 1.1285

Trading Recommendations

Sell ​​Stop 1.1010. Stop-Loss 1.1055. Take-Profit 1.1000, 1.0960, 1.0940

Buy Stop 1.1055. Stop-Loss 1.1010. Take-Profit 1.1085, 1.1110, 1.1130, 1.1200, 1.1225, 1.1270, 1.1285


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