EUR/USD: general analysis

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Current trend

The ECB’s decision to expand the quantitative easing to nearly 1 trillion euros failed to provide support for the EUR/USD pair, and currently, it is trading near 3-year lows and does not have fundamental prerequisites for recovery.

The US dollar is again perceived by investors as a low-risk asset, confirming its unique role in the global economy. According to the forecast of JP Morgan, the slowdown in economic activity in the EU amid the spread of coronavirus will result in a 15% drop in GDP in the first quarter of this year, while in the US this figure is three times less. In this situation, it is highly likely that the instrument will continue to decline to the area of 1.0500, while the impact of macroeconomic releases on price dynamics will be minimal and short-term.

Today at 14:30 (GMT+2), data on manufacturing activity and the labor market in Philadelphia will be released. The publication will not have a significant impact on the price.

Support and resistance

On a 4-hour chart, the instrument is testing the key support level of 1.0800. Bollinger Bands are directed downwards, and the price range is increasing, indicating a further fall in the pair. The MACD histogram keeps a strong sell signal. Stochastic is preparing to enter the oversold zone, a buy signal is expected within a day.

Resistance levels: 1.0924, 1.1028, 1.1141, 1.1255.

Support levels: 1.0805, 1.0775, 1.0705, 1.0631.

Trading tips

Short positions may be opened from the current level with the target at 1.0650 and stop loss 1.0925. Implementation period: 2–3 days.

Long positions may be opened above the level of 1.0925 with the target at 1.1030 and stop loss 1.0880. Implementation period: 1–2 days.

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