European currency continues to fall against the USD. Despite the fact that Euro is oversold, investors fear to invest all funds to the risky assets. Yesterday, EUR/USD traded near the local lows of 1.2820 and the speech by the ECB chairman, Mr. Mario Draghi did not affect the rate.
This morning, the pair went up due to the positive business activity index in the service sector of Eurozone. In addition, attention today shall be paid to the speeches of the members of the US FOMC and the key US indices.
European currency is not expected to strengthen significantly in future. The pair is likely to undergo consolidation phase, trading in the narrow range of 1.3000-1.2810 and will probably rise to the level of 1.2750. It is expected that tomorrow’s data on IFO in Germany will be negative, putting pressure on the pair. However it also worth noting that the American currency has started to relieve pressure on Euro, which means that significant decline in Euro is unlikely. Revision of sanctions against Russia may have a positive impact on European currency.
Support and resistance
Support levels: 1.2820, 1.2750, 1.2700 and 1.2660.
Resistance levels: 1.2910, 1.3000, 1.3030, 1.3100 and 1.3190.
In the current situation it is recommended to trade on trend, placing short orders at the current price and pending short orders from the levels of 1.2920 and 1.3000 and take profit at 1.2750 (1.2700).Publication source