Current trend
Yesterday the pair substantially declined amid strengthening in the US Dollar.
The American currency was supported by strong macroeconomic statistics from the US. In September, the Markit Services PMI grew from 51.0 to 51.9 points, against a forecasted increase to only 51.1 points. The Consumer Confidence rose from 101.8 to 104.1 points while economists predicted a decline to 99.0 points.
In addition, the Dollar was supported by the results of the first presidential debates in the US, during which the democratic candidate Hilary Clinton appeared more convincing than her opponent Donald Trump did. Market participants are afraid of unpredictability of Trump while Clinton’s victory brings fewer risks.
Support and resistance
Bollinger Bands on the daily chart is moving horizontally while the price range is narrowing. MACD is turning down and forming a sell signal. Stochastic turned down as well having bounced off the border of the overbought zone.
The indicators recommend short positions.
Support levels: 1.1200 (local low), 1.1190 (local low), 1.1171, 1.1148, 1.1130, 1.1122 (31 August low).
Resistance levels: 1.1228 (local high), 1.1253, 1.1268, 1.1284 (9 September high), 1.1300, 1.1326 (8 September high), 1.1340 (26 August high).
Trading tips
Short positions can be opened after the breakdown of the level of 1.1200 with targets at 1.1130, 1.1100 and stop-loss at 1.1230. Validity – 2-3 days.
Long positions can be opened after the price consolidation above the level of 1.1210 with targets at 1.1270, 1.1300 and stop-loss at 1.1180. Validity – 2-3 days.
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