On Wednesday, the European currency declined against the US Dollar amid quite poor macroeconomic statistics, released in the eurozone.
In November, the core Consumer Price Index came in at 0.9% down from 1.1% that is 0.1% below the forecast. Consumer Price Index, in its turn, remained unchanged at 0.1%, while analysts expected a 0.2% growth.
However, a decline in the pair halted when Fed Chair Janet Yellen stated that the timing of a rate increase would depend on the incoming economic data. At the same time, according to her, inflation is likely to reach the target level of 2% quite soon.
Support and resistance
Bollinger Bands indicator on the daily chart is still declining but tends to turn horizontally. The price range is narrowing down. MACD is growing and keeping a week buy signal. Stochastic is moving up towards the border of the overbought zone.
According to the indicators, the price might start correcting up in the short term.
Support levels: 1.0600, 1.0550 (2 December low), 1.0520 (13 April low).
Resistance levels: 1.0638 (27 November high), 1.0673, 1.0706, 1.0762 (19 November high), 1.0808, 1.0843.
Long positions can be opened after the breakout of the level of 1.0635 with targets at 1.0675, 1.0740 and stop-loss at 1.0600. Validity – 1-2 days.
Short positions can be opened after the breakdown of the level of 1.0560 with the target at 1.0461 and stop-loss at 1.0590. Validity – 2-3 days.