At the end of last week European currency started to strengthen against the USD amid negative US labour market statistics. Yesterday, additional pressure on the American currency was caused by the negative data on the US business activity index. The pair EUR/USD went up and almost reached key resistance level and the local highs of 1.1050.
Today, European currency started to lose positions due to negative news on business activity index in France and Eurozone. In addition, attention shall be focused on producer price index in Eurozone and US nonfarm payroll and some other US news.
It is worth noting that following any upward correction, European currency comes under pressure from investors. Amid long-term downward correction and complicated macro-economic situation in Eurozone, investors sell European currency at the key resistance levels, as they await that Euro will weaken. If plus to this fundamental catalysts also indicate the decline, then Euro is sharply losing positions versus the USD.
Support and resistance
Today, the pair EUR/USD can go further down up to support level of 1.0710. In the medium-term downtrend will continue.
Support levels: 1.0860, 1.0810, 1.0810, 1.0660, 1.0580, 1.0550, 1.0500 and 1.0460.
Resistance levels: 1.0940, 1.1010, 1.1050, 1.1110, 1.1160, 1.1240 and 1.1290.
It makes sense to open short positions from resistance levels of 1.0940, 1.1010 and 1.1050 and stop-loss above resistance level of 1.1050 and take profit at the levels of 1.0620 and 1.0550.
Analytics of LiteForex Investment Limited