In the previous trading session, the EUR/USD continued to fall due to the strengthening of dollar and weak statistics from the Eurozone.
Today, the pair found support at 1.0859 (March low), from which the correction started. Support for the pair grows from the Germany and the Eurozone statistics. In Germany, the Markit index in service sector rose to 54.1 points in October from 50.9 points a month earlier. PMI Markit in manufacturing sector in October rose to 55 points from 54.3 points a month earlier. The Eurozone PMI Markit in the service sector increased in October to 53.5 points from 52.2 points a month earlier. Reacting to this news the EUR/USD will try to regain some of the lost positions, as the macroeconomic calendar today contains no significant releases that could have an impact on the rate of EUR/USD. On Tuesday, investors expect the speech of ECB President Mario Draghi (17:30 GMT+2), which may lead to increased volatility on the EUR/USD.
Support and resistance
Support levels: 1.0859, 1.0810, 1.0770, 1.0730.
Resistance levels: 1.0910, 1.0950, 1.1004, 1.1038.
Trading tips
On the 4-hour chart Bollinger bands are directed downwards, indicating that the downward trend is still strong, but the price broke the lower band and can be adjusted to the area of the moving average. The MACD histogram is in the negative zone, but its volumes are gradually reduced, indicating a continuation of upward correction.
Positions to buy can be opened after the break and consolidation above the level of 1.0910 with the targets in the area of 1.0950, 1.1004 and stop loss at 1.0880.
Sell positions should be placed below 1.0859 with the targets of 1.0810, 1.0770 and stop loss at 1.0889.
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