Current trend

The EUR/USD pair shows a moderate growth, developing the "bullish" momentum formed last week. The instrument is testing the level of 1.1030 for a breakout, renewing local highs from May 8.

Today, market participants are waiting for the publication of June statistics on consumer inflation, hoping that it will allow predicting further steps by the US Federal Reserve on monetary policy: analysts believe that the Consumer Price Index will slow down from 4.0% to 3.1% in annual terms, and on a monthly basis, on the contrary, it may accelerate from 0.1% to 0.3%, while the Core CPI may correct from 5.3% to 5.0%.

In addition, traders analyze European statistics, which was presented the day before. The Consumer Price Index in Germany in June remained at 0.3% MoM and 6.4% YoY, which is still well above the target levels of the European Central Bank (ECB), while Core CPI is kept at 6.8%. The current dynamics, according to experts, are not related to fundamental factors, but to the abolition of temporary fuel tax cuts and travel subsidies introduced by the German government last year.

Also, statistics from the Center for European Economic Research (ZEW) came into the view of investors the day before. The Economic Sentiment Index in July in the eurozone fell from -10.0 points to -12.2 points, while analysts expected -10.2 points, the Current Situation index in Germany fell from -56.5 points to -59.5 points, which turned out to be slightly better than forecasts at the level of -60.0 points, and the German Economic Sentiment index went from -8.5 points to -14.7 points, while experts expected -10.0 points.

Support and resistance

Bollinger Bands in the daily chart gradually reverse upwards. The price range is expanding but it fails to conform to the surge of "bullish" activity at the moment. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic, having reached its highs, reversed into a horizontal plane, indicating overbought euro in the ultra-short term.

Resistance levels: 1.1050, 1.1100, 1.1150, 1.1220.

Support levels: 1.1000, 1.0969, 1.0930, 1.0891.

Trading tips

Long positions can be opened after a breakout of 1.1050 with the target of 1.1150. Stop-loss — 1.1000. Implementation time: 1-2 days.

A rebound from 1.1050 as from resistance, followed by a breakdown of 1.1000 may become a signal for opening of new short positions with the target at 1.0900. Stop-loss — 1.1050.