EUR/USD: Euro Under Pressure
Yuri Papshev | Aug 18, 2017 11:12
Received in the course of yesterday's US session, positive data from the US Department of Labor on the number of initial applications for unemployment benefits supported the dollar and increased pressure on the EUR/USD. The forecast was expected to decrease to 240,000 versus 244,000 for the previous period. However, the report surpassed expectations, indicating that the number of initial applications for unemployment benefits fell to 232,000.
The euro came under pressure after yesterday's minutes were published from the last ECB meeting on monetary policy, from which it followed that the central bank's leaders are worried about the strong growth of the euro this year. Among investors there was an opinion that the ECB could extend the soft monetary policy for another 6 months. As you know, the program QE in the Eurozone ends in December. The Eurozone economy shows signs of stable growth. However, inflation is still far from the target level of the ECB just below 2.0%.
Despite the fact that there is no consensus among the leaders of the Fed on the need for another interest rate increase this year, the EUR/USD pair may resume the decline if the ECB actually takes measures to extend the QE program.
With the opening of today's trading day, there is a decline in the dollar. However, active growth of the EUR/USD is also not observed. The news background today is generally calm. If the pressure on the euro through cross-pairs increases, then a slight increase in EUR/USD, observed at the beginning of today's trading day, may stop, and EUR/USD will resume yesterday's decline.
Volatility in the foreign exchange market may grow today at the beginning of the US trading session, when the consumer price index (CPI) is published (at 12:30 GMT) in July in Canada. EUR/USD, meanwhile, continues to decline in the short-term downlink on the 4-hour chart, the lower limit of which is near the important support level 1.1630 (EMA200 on the 4-hour and weekly charts). The breakdown of the support level 1.1630 will strengthen the risks of a return to the downtrend. Nevertheless, it is premature to talk about the reversal of the bullish trend of the EUR/USD pair. The positive dynamics above the level of 1.1630 remains.
Support levels: 1.1690, 1.1630
Resistance levels: 1.1780, 1.1835, 1.1890, 1.1910, 1.1950, 1.2050, 1.2180
Trading recommendations
Sell in the market. Stop-Loss 1.1785. Take-Profit 1.1690, 1.1630, 1.1600, 1.1550 Buy Stop 1.1785. Stop-Loss 1.1710. Take-Profit 1.1835, 1.1890, 1.2000, 1.2050, 1.2100, 1.2180
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