Current trend
Yesterday, Unified European currency has lost 117 points. Euro was under pressure from Washington’s news. House of Representatives of the US Congress managed to resolve the issue of public debt, which enabled to avoid default in the country. The decision to raise the ceiling of public debt supported the USD and Euro significantly weakened. Another fact, which had a negative impact on Euro was the statement of the head of St. Louis FRB about possibility of termination of the quantitative easing programs this year. In case economic growth in the USA will reach 3%, and unemployment rate will be 6%, it will give a chance to the US Fed to terminate QE3 program without much concerns. However, if low interest rates will be maintained for a long time, it may trigger economic “bubbles” in the markets.
Support and resistance
Important support level for Euro is the bottom limit of the trading channel (1.3498). If the “bears” manage to overcome this level, the pair EUR/USD will fall to 1.3433. The nearest resistance level is the upper limit of the trading channel (1.3682)
Trading tips
It is recommended to open short positions after breakdown of the level of 1.3500 with protective orders at 1.3530 and a target of 1.3420.
Dmitry Agurbash,
Analyst of LiteForex Group of Companies
