Current trend

The EUR/USD pair shows ambiguous trading dynamics, holding near 1.0860. Activity in the market remains quite low, as trading participants expect the emergence of new drivers of movement.

On Wednesday, July 31, investors will focus on July inflation data from the eurozone, with analysts expecting the Consumer Price Index to slow down to 2.3% year-on-year from 2.5%, and the Core CPI excluding Food and Energy to slow down to 2.8% from 2.9%. Meanwhile, eurozone consumer inflation expectations have not improved for the first time since January, according to the European Central Bank (ECB), highlighting the ongoing risks and the impossibility of a quicker return of the CPI to the 2.0% target. The regulator's officials predicted that it would reach 2.8% over the next 12 months, in line with the pace in the previous month's survey, and the three-year forecast remained at 2.3%, while perceived inflation over the previous 12 months fell to 4.5% from 4.9%.

Tomorrow, market participants will turn their attention to data from the EU: quarterly growth of the German economy is expected to slow down from 0.2% to 0.1%, while eurozone Gross Domestic Product (GDP) in annual terms could accelerate from 0.4% to 0.6%, and in quarterly terms it could add another 0.3%.

The US Federal Reserve's interest rate decision is due out on Wednesday at 20:00 (GMT 2): experts do not expect any changes to the rate from the previous 5.50%, but comments from officials and updated forecasts will be very important, given that there is little time left until September (the expected month for the first rate cut). July labor market data are due out later this week, with Nonfarm Payrolls forecast to slow down to 185.0 thousand from 206.0 thousand, Average Hourly Earnings expected to increase 0.3%, and the Unemployment Rate likely to remain unchanged at 4.1%.

Support and resistance

Bollinger Bands in the daily chart show unsteady growth. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic, having rebounded from the level of "20", reversed upwards, signaling in favor of further development of corrective growth in the ultra-short term.

Resistance levels: 1.0869, 1.0900, 1.0930, 1.0964.

Support levels: 1.0844, 1.0820, 1.0800, 1.0765.

Trading tips

Long positions can be opened after a breakout of 1.0869 with the target of 1.0930. Stop-loss — 1.0844. Implementation time: 2-3 days.

A rebound from 1.0869 as from resistance, followed by a breakdown of 1.0844 may become a signal for opening of new short positions with the target at 1.0800. Stop-loss — 1.0869.