Yesterday the EUR/USD pair significantly fell as it corrected from local highs of Wednesday. The pair remains under pressure amid expectations of an interest rate increase in the US next week. At the same time, additional pressure on the Euro comes from ECB policies as it already eased its monetary policy at its last meeting and is ready to apply additional stimulus measures if the situation in the eurozone requires it.
Support and resistance
Bollinger Bands on the daily chart is moving down while the price range is widening. The indicator however signals a possibility of the correctional fall in the pair. MACD is slowly turning down but keeps giving a buy signal. Stochastic is in the overbought zone and turning down.
The indicators recommend waiting for clearer trading signals.
Support levels: 1.0900 (local low), 1.0843, 1.0808 (7 December lows), 1.0762, 1.0706, 1.0673, 1.0638, 1.0600.
Resistance levels: 1.1000 (local high), 1.1042 (9 December high), 1.1100, 1.1153, 1.1200 (22 October high), 1.1245, 1.1300.
Long positions can be opened after the breakout of the level of 1.0960 (with the appropriate indicators signals) with targets at 1.1020, 1.1170 and stop-loss at 1.0910. Validity – 1-3 days.
Short positions can be opened after the breakdown of the level of 1.0920 with the target at 1.0820 and stop-loss at 1.0950. Validity – 2-3 days.