Current trend
The European currency keeps strengthening against the British Pound, reaching new local high. However, the growth is affected by controversial EU macroeconomic statistics.
In particular, Italian Inflation Rate slowed from +0.4% to 0.3% in July. Economic Sentiment in Germany fell from 29.7 to 25.0 points against the forecast of 32 points.
The following positive statistics are worth mentioning. In August, Assessment of the Current Economic Situation in Germany grew from 63.9 to 65.7 points. The increase in EU Economic Sentiment was higher than expected (47.6 points from 42.6 points earlier, vs. 43.9 forecast).
Support and resistance
Bollinger Bands on the daily chart indicated flat dynamics in the medium term. The price is near the upper border of the range, so the further pair growth may slow down. Moreover, a correctional rollback is possible if the price leaves the range.
MACD is growing steadily, keeping a strong buy signal (the histogram is above the signal line). The indicator has overcome the zero mark. Long positions are recommended on the short term.
Stochastic is in the overbought zone and is trying to turn to sideways which may indicate a possible correctional decline at the end of the week.
Support levels: 0.7100, 0.7079, 0.7038 (11 August local low), 0.7015, 0.6984, 0.6950 (5 August low) è 0.6935 (17 July low).
Resistance levels: 0.7118 (nearest mark and current local high), 0.7137, 0.7159 (27 July high), 0.7223 (10 July high).
Trading tips
Open long positions when the price breaks through the current resistance (with appropriate indicators signals). Set take-profit at 0.7159-0.7200 and stop-loss at 0.7079-0.7050.
Open alternative positions when the price breaks through 0.7079 and rebounds from this level. Set take-profit at íà 0.7038, 0.7015, 0.7000 and stop-loss at 0.7125-0.7137.
