Last week the American dollar had received support after the meeting of the US FOMC; at the same time, the pair EUR/USD has weakened and continues to remain under pressure. Follow-up statements of the US Fed were sharper than expected by investors. The latest statistics also showed that growth rate is at the same level.
This trading week the pair had started with the downward movement and quickly reached new local lows. The difference between growth rate of the American and European economies are increasing. The data, which will be released this week, will probably confirm this fact.
Today, business activity index in the US manufacturing sector for October will become known. On Wednesday, business activity index in the service sector for the same period. At the end of the week, the US labor market data will traditionally become known. Forecast for the labor market is below the previous level. However, if the new index reaches the level of the previous month, American currency will receive significant support.
Levels of support and resistance
Resistance levels: 1.2500, 1.2550, 1.2580 and 1.2600. The main target of the “bulls” is to consolidate above the level of 1.2500.
Support levels: 1.2485, 1.2460 and 1.2440.
It is recommended to open long positions above the level of 1.2550 with the target of 1.2650. Sell positions can be opened at the level of 1.2440, do not forget to place protective orders.
LiteForex Investments Limited Analyst