At the previous trading session European currency has significantly weakened against the American currency. Starting from the morning Euro had been declining. The pressure on the pair was caused by the comments of Mr. Mario Draghi about possibility of the additional incentive measures aimed at the increasing inflation level in Eurozone. Amid this fact Euro lost over 150 points.
Today, investors are waiting for the data on ISM index in Germany (12:00 GMT+2), and business activity index in the US service sector (17:45 GMT+2).
Support and resistance
On the four-hour chart technical indicators show that downward movement will continue. Bollinger bands are diverging, forming a sell signal. MACD histogram is in the negative zone; its volumes are increasing.
Resistance levels: 1.2410, 1.2460, 1.2510 and 1.2570.
Support levels: 1.2380, 1.2360, 1.2300 and 1.2250.
If current trend continues, it is advisable to open sell positions after breakdown of the level of 1.2380 with the nearest target of 1.2360. However, correction movement is also possible. The “bulls” will try to push the pair up to the level of 1.2410, from which buyers will make an attempt to test the level of 1.2460.
Analyst of LiteForex Investments LimitedPublication source