On Monday Unified European currency traded near the moving average with the period 200 in the range of 25-30 points. Positive macro-economic news from Germany showing that business sentiment index Ifo had grown to 110.6 points, was not able to support the “bulls”.
Most investors do not wish to take unnecessary risk opening trading positions in advance of the US Fed meeting, where a decision to further reduce quantitative easing program may be adopted. If volumes of bonds purchase are reduced again, positions of the American currency will strengthen. It is assumed that the US fed is going to cut incentive program by 10 billion USD after each meeting.
Special attention today shall be paid to retail sales in Germany: according to preliminary estimates this index shall grow, which will support Euro. However, it significant growth is not expected until the US Fed meeting.
Levels of support and resistance
The nearest resistance level is the local highs of 1.3716. Support level is the lower limit of the sideways channel at 1.3652.
Trading tips
It is recommended to open short positions after breakdown of the level of 1.3652 with stop-loss around 1.3682 and a target of 1.3555.
Dmitry Agurbash
Analysts of LiteForex Group of Companies
