Published On: Mon, Mar 13th, 2017

EUR/USD: the long downward correction

InstaForex

Current trend

Last week the EUR unexpectedly grew due to the rapid growth of the demand. The ECB implemented that the economy stimulation program will be closed, and the EUR reached the upper border of the wide sideway consolidation channel. On Friday the upward trend developed after the USA employment market data publication. The data exceeded the expectations, but stayed below the previous values, and the unemployment level was at the expected level of 4.7%. Despite the positive releases, the USD weakened, and the EUR/USD pair crossed the key resistance level of 1.0630. The investors’ interest grew rapidly, and in the last hours of the Friday trading session the pair increased greatly. In the beginning of the current week the EUR is still supported and consolidates at 1.0710. The traders began to fix the long positions of the pair, so the USD could restore some of the Friday lowering. Today the main catalyst for the pair is the Head of the ECB Mario Draghi, which will determine the further dynamics of the pair.

Support and resistance

Today the EUR is lowering due to the ECB Governing Council member speech. In addition the volumes of the long positions lowered rapidly, so the pair lost more than 50 points. It’s possible that the traders sell the EUR before the Head of the ECB Speech. The lowering to 1.0610, 1.0685, 1.0570 is expected.

Support levels: 1.0630, 1.0610, 1.0585, 1.0570, 1.0520, 1.0480, 1.0465, 1.0435.

Resistance levels 1.0700, 1.0710, 1.0730, 1.0755, 1.0785, 1.0815.

Trading scenario

Open short positions at the current level with the target at 1.0585, stop loss is at 1.0740.

Forex Analysis

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