Trading news

EUR/USD: general analysis

Current trend 

The Unified European currency is still trading in the upward channel, having on its way a strong resistance level of 1.4000. If this level is broken down Euro may go up to 1.4250.

Meanwhile it is worth mentioning that in his speech in Vienna the head of ECB said that high exchange rate of Euro bears risks for European economy and helps reduce inflation rate and increase a possibility of deflation risks. ECB will closely monitor fluctuations in the currency market and can adopt measures for easing fluctuations.

Statistics which was published on Monday confirms concerns of monetary authorities as inflation rate in February fell again. Inflation has been maintained at the level of 1% for the fifth consecutive month. Euro commission believes that by the end of the year inflation can reach 1.3% on annual basis. Experts think that deflation risks can reduce investments and impedes economic growth; therefore ECB needs to take new steps to overcome risks using monetary policy tools.

Levels of support and resistance

The nearest resistance level is 1.4000, which coincides with the upper limit of the trading channel. Support level is 1.3877 – the lower limit of the trading channel.

Trading tips 

It is recommended to open short positions after breakdown of the level of 1.3877 with protective orders at 1.3900 and a target of 1.3740.

 

Dmitry Agurbash

Analyst of LiteForex Group of Companies

Wednesday, 19 Mar, 2014 / 8:07

Source : http://www.liteforex.com/

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