EUR/USD: analysis and forecast for May 09, 2014

May 9, 2014

Current trend

Yesterday, investors’ attention was focused on Mario Draghi’s speech. Since the first moments of the press-conference by the chairman of ECB, the pair EUR/USD soared up to the level of 1.3993, which are the highs since 2011. However, following his statement that high exchange rate of Euro raises concerns of the regulator the pair fell to the level of 1.3850. There have not been made any direct statements, but there have been some hints that volume of asset purchase program can be increased. Mr. Draghi also said that ECB expects that low level of inflation will be maintained for a long period; therefore, the bank has prepared some measures.

Support and resistance

The nearest support level is Fibonacci retracement of 23.6% (1.3830). Next support levels are 1.3810, 1.3795 and 1.3785. Resistance levels: 1.3860, 1.3880, 13890 and 1.3910.

Trading tips

It is advisable to open short positions below the level of 1.3830. Limit sell orders can be placed at the level of 1.3890. 

Ilya Lashenko

LiteForex Investments Limited Analyst

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