Following the significant decline of European currency against the USD, the pair has started to strengthen, and is now trading in the narrow range of 1.2870 - 1.2970. Eurozone has not demonstrated high economic growth lately, while introduction of the sanctions has intensified the negative impact. Euro is weak and is not able to win back at least some of the losses.
Ambiguous data on economic sentiment index was released today. The index in Germany was positive and above the forecast, while the same index in Eurozone fell to the level of 14.2 points. This week the pair can be supported by the results of tomorrow’s meeting of the US FOMC.
Levels of support and resistance
It is likely that the demand for the American currency will continue to increase. On Wednesday investors expect that the timing of the monetary policy tightening will be specified on Wednesday, which can trigger further rise in the USD. In the medium-term the target is 1.2700. Many analysts believe that the pair can reach the two-year lows at the level of 1.1500-1.1000.
Support levels: 1.2910, 1.2860, 1.2750 and 1.2700.
Resistance levels: 1.3000, 1.3030, 1.3100, 1.3190 and 1.3245.
In the current situation it makes sense to trade on trend, placing short positions at the current price and pending short positions from the level of 1.3000 (1.3100) with take profit at the level of 1.2700.
Analyst of LiteForex Investments Limited