Yesterday European currency weakened against the USD and the pair EUR/USD fell to the lows of the week. At the beginning of the week situation in the market was the opposite. The USD was falling after the declaration of the US Fed chairman about continuation of the soft monetary policy. However, lowering of the interest rate by ECB caused the decline in Euro. Additional support to the USD was provided by the publication of the minutes of the last meeting of the US Fed. Monetary authorities of the USA announced their decision to tighten monetary policy despite Bernanke’s ideas.
Support and resistance
The nearest support level on the daily chart is 1.3414 (yesterday’s lows and moving average with the period 100). Next support is the level of 78.6% (1.3375) Fibonacci retracement. Resistance levels are 1.3440 and 1.3485 (moving average line with the period 55). MACD histogram on the daily chart is below the zero level; volumes are slowly increasing, which suggests that downward movement will continue.
A lot of economic news will become known today, which can affect further movement in the pair, therefore be careful about the deals. Short positions are recommended after breakdown of the level of 1.3410 with partial profit taking at the level of 1.3375 and shifting positions into the breakeven zone. Final target is the level of 1.3300.
Analyst of LiteForex Group of Companies