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EUR/USD: Euro continues to weaken


Current trend

On Thursday the currency pair EUR/USD continued to decline reaching two-week lows at the level of 1.3748. The USD was supported by positive results of stress-tests in the large U.S. banks, which showed that 29 out of 30 banks were prepared to withstand significant decline in American economy and long-term recession. Therefore, US banking system is in the best state since 2009. The main news of today is the decision of Fitch agency on US credit rating. In case of lowering of the rating, the pair EUR/USD may experience upward correction.

Support and resistance

At the moment the pair is trading at the level of 1.3775. In the near future downward movement can reach the levels of 1.3750, 1.3725 and 1.3700. Correction is possible up to the levels of 1.3800, 1.3825 and 1.3845; the latter one is close to the middle line of Bollinger bands indicator. Technical indicators give mixed signals. The price had corrected and moved to the range of Bollinger bands, which are directed downwards, confirming downtrend. MACD histogram is in the negative zone and its volumes are increasing. Stochastic line are also directed upwards.

Trading tips

It is advisable to open short positions below the level of 1.3775 with the target of 1.3700. Long positions with the target of 1.3845 can be opened if the price reaches the level of 1.3800.

Dmitry Zolotov
Analyst of LiteForex Group of Companies

Source: https://www.liteforex.com/
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