The EUR/USD did not reach its new 2-year lows yesterday. Traders ignored weak data on the industrial sector business activity index of the eurozone. The previous value of the index equaled 50.5 points, whereas its actual value amounted to 50.3 points in September.
The investors focused on a forthcoming meeting of the ECB. Many of them are expecting some hints that the policy geared towards stimulating the economy will be extended. The latest data on inflation showed the lowest value over the last 2 years, just as little as 0,3%. Such tendencies cannot but worry the European monetary authorities.
The interest rates remain at the minimum levels; the ECB is expected to take other stimulating measures. Even the slightest hint of their realization may influence badly the EUR/USD rate in this situation.
Support and resistance levels
The following levels act as support levels: 1.2612 (the minimum of the Asian session) and 1.2569 (the minimum of the last 2 years). If the latter, a key level for “bears”, is broken down, the price will decrease much more.
The following levels serve as resistance levels: 1.2702 (the maximum of 30th September), 1.2761 (the maximum of 26thSeptember), and 1.2830 (21-day MA).
The likeliest scenario is that the price will continue to decline. Short positions may be opened after the price consolidates below the level of 1.2610. The first target is at 1.2565, the next one – at 1.2500.Publication source