EUR/USD: the pair corrects upward

Current trend

The EUR/USD pair corrects upwards due to positive EU macroeconomic data and is trading around 1.1895.

The European currency is supported by macroeconomic statistics. The volume of industrial production for July increased to 4.1% MoM against a forecast of 4.0%. Also, yesterday, another transaction was made for the purchase of assets under the TLTRO III program for an estimated amount of 20 billion euros, as well as a part of an additional temporary envelope in the amount of 120 billion euros, which is expected to be phased out by the end of the year.

The US dollar has moved to a downward trend again, and there are several reasons at once. Firstly, these are ongoing actions in large US cities, which have practically paralyzed all small businesses. Secondly, it is the weather conditions that have led to record forest fires in California and several neighboring states. Among the economic reasons, the negative moment was the placement of short-term 3-month treasury bonds, the yield on which fell to 0.110% from 0.115%.

Support and resistance

The correction to the global uptrend has transformed into a global Expanding formation pattern, within which the price is below the support line of the local channel. Technical indicators continue to hold the global buy signal, which increases the possibility of further growth.

Resistance levels: 1.1918, 1.2010.

Support levels: 1.1787, 1.1695.

Trading tips

After growth or consolidation above 1.1918, buy positions with the target at 1.2010 become relevant. Stop loss is 1.1860, below the support level.

After a reversal and decline or consolidation below the local minimum and the support level at 1.1787, sell positions with the target at 1.1695 become relevant. Stop loss is 1.1810, above the local resistance.

Implementation period: 4 days or more.