On Thursday, the Euro managed to strengthen significantly against the USD amid poor macroeconomic statistics from the US.
Even though the number of Initial Jobless Claims for the week fell from 281 to 275 thousands, Continuing Jobless Claims showed an increase to 2.260 million, against forecasted 2.250 million claims. Furthermore, the yearly Import Price Index for August declined by 11.4%, against the previous figure of -10.4%, the worst decrease since January. The monthly index showed a 1.8% reduction.
Support and resistance
The middle MA of Bollinger Bands on the daily chart continues moving downwards, despite a substantial growth in the Euro, while the price range narrows rapidly. MACD is growing and giving a weak buy signal. Stochastic is approaching the overbought zone, which could indicate a fall in demand for the pair in the short-term.
The indicators recommend considering long positions, or wait for a clearer trading signal.
Support levels: 1.1245, 1.1200, 1.1153, 1.1100 (3 and 4 September lows), 1.1035, 1.1000 (psychologically important level), 1.0970, 1.0900 (beginning of August low).
Resistance levels: 1.1300 (local high), 1.1360, 1.1400, 1.1500, 1.1560 (26 August high), 1.1621, 1.1713 (24 August high).
Long positions can be opened after the breakout and consolidation above the level of 1.1300 with the target at 1.1400 and stop-loss at 1.1200.
Short positions can be opened after the price rebound from the level of 1.1300 with targets at 1.1200, 1.1100 and stop-loss at 1.1360, 1.1380.Publication source