Current trend
European currency continues to consolidate around Murrau level of 1/8 (1.3733). If this level is broken down, the pair will drop to the level of 1.3672.
Experts believe that ECB will take measures to lower the rate in case the pair approaches the level of 1.4200. On the other hand, despite that fact that consumer price index in Eurozone rose to the level of 0.7% in April, risk of deflation is still there. Interest rate is kept at the minimal level and is unlikely to be increased in the near future.
It is worth noting that sanctions imposed by the West against Russia negatively affect profit of many large European companies due to deterioration of financial climate and slowdown of economic activity.
Today, sentiment index in the business sector of EU, as per ZEW estimates will be known today. It is expected that the index will rose to 63.5 points, while the same index in Germany is expected to drop to 41.3. Given the conflicting data, Euro is likely to decline.
Support and resistance
The nearest resistance level is 2/8 Murray (1.3794). Support level is 1.3733 (1/8 уровня Мюррея).
Trading tips
It is recommended to open short positions after breakdown of the level of 1.3733 with stop-loss at 1.3760 and a target of 1.3670.
Dmitry Agurbash
Analysts of LiteForex Investments Limited
