Yesterday the pair EUR/USD tried to overcome the level of 1.2700. European currency has weakened against the USD due to the rise in yield of the US ten-year treasury bonds. Sharp decline in EUR took place after the release of European inflationary statistics. It became known that consumer price index on annual basis rose only by 0.3%, which is the worst result since 2009. Growth in price within a month amounted to 0.4%, which agrees with the forecast. Despite negative statistics Euro had regained some of the losses and almost reached the previous local highs at the level of 1.2844. However, neither the news about the rise in the US industrial production (+1%), nor the reduction in the number of initial applications for the unemployment benefits, (which has decreased by 23 thousand), could not cool down enthusiasm of the “bulls”. It is likely that the USD will need more positive economic data in order regain lost positions.
Support and resistance
Resistance levels are the local highs of 1.2844, 1.2885 and 1.3000.
Support levels: 1.2790 (lows of the Asian session), 1.2700 (Fibonacci retracement of 50%), 1.2624 (lows of 15 October).
It is advisable to open short positions after breakdown of the level of 1.2780 with the target of 1.2700. Buy positions can be opened at the level of 1.2845 with the targets of 1.2885 and 1.2990.
Analyst of LiteForex Investments LimitedPublication source