On Monday, despite weak US ISM Manufacturing PMI, which declined from 50.2 to 50.1 points in October, the US dollar managed to strengthen against most its counterparts at the end of the trading day.
During last three weeks, the price of gold has been falling, indicating that investors are getting ready for a possible US interest rate hike. As long as there is a 92% correlation between the price of gold and the EUR/USD pair, this downward dynamics cannot be overlooked while analyzing further movement of the EUR/USD pair.
Today it is worth noting the ECB President Mario Draghi's Speech. The head of the ECB will comment on prospects of the EU .
Support and resistance
OsMA and on the 4-hour, weekly and monthly charts are giving sell signals. On the , they, probably, indicate that an upward correction has not finished yet. While the price remains below the levels of 1.1235 (EMA144 on the ), 1.1285 (23.6% Fibonacci), 1.1350 (EMA200 on the ), short positions are more preferable. The breakdown of the level of 1.1020 (the lower border of an upward channel on the weekly chart) may allow the price to continue declining to 1.0860, 1.0820 and 1.0500 (year lows).
Support levels: 1.0900, 1.0860, 1.0820.
Resistance levels: 1.1050, 1.1235, 1.1285, 1.1350.
Open short positions from the level of 1.0990 with targets at 1.0910, 1.0860, 1.0820 and stop-loss at 1.1035 or when the price turns down at the level of 1.1050 with targets at 1.0910, 1.0860, 1.0820 and stop-loss at 1.1090.
Open long positions from the level of 1.1120 with targets at 1.1150, 1.1200, 1.1250 and stop-loss at 1.1080.
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