At the yesterday’s trading session European currency significantly strengthen against the USD despite positive statistics on the business activity index in the US service sector. In April this index has exceeded both the forecast and the previous value, reaching the level of 57.8 points. On Wednesday, the pair continued to rise and reached the level of 1.1269 and then corrected. Now, the pair is at the level of 1.1230.
Apart from the speech of Mrs. Janet Yellen, the head of the US Fed, economic calendar is uneventful today.
Support and resistance
On the four-hour chart Bollinger bands demonstrate slight divergence, which confirms the downward correction can reach the moving average line at the level of 1.1180. MACD histogram is in the positive zone; its volumes are slowly increasing, which indicates continuation of the rise in price. It is likely that in the near future downward correction will continue.
Resistance levels: 1.1270, 1.1290 and 1.1340.
Support levels: 1.1170, 1.1220 and 1.1060.
Sell positions can be opened from the current levels with the nearest target of 1.1170. Breakdown of this level will open the way to 1.1120. It is also possible that the price will reverse from the level of 1.1170 and in this case the growth in price can go back to the recent highs of 1.1270 and 1.1290.