On Monday, US dollar strengthened against the euro. However, after that weak fundamental data on US Retail Sales, which was not in line with forecasts, and it stimulated the demand for the European currency. It helped the bulls to back the pair to the opening price value.
The trading session closed in favour of the US dollar which consolidated 16 points against the euro, trading volatility was 86 points.
Fundamental review:
Though consumers in the US have spent more it was due to gasoline and car purchases.
According to Department of Commerce, in June Retail Sales of goods rose 0.4% and totaled $422.79 billion. However, excluding car and gasoline sales dropped 0.1%. The economists forecast a 0.8% growth compared to the previous month.
Compared to the same period of the last year Retail Sales added 5.7%.
Technical analysis:
The pair has occupied flat position pointing the uncertainty of major market participants in terms of perspectives of the global economy. Trading is in small down price channel, its lower boarder is in the area of the low of July 12, 1.2998 and yesterday’s low, 1.2993. The upper boundary of the channel passes through the high of July 12, 1.3099.
Yesterday’s move of the EUR/USD pair had almost the same image as during the trading session held recently. Thus, support and resistance levels are the same.
As we may observe, the area 1.3087 serves the major function of resistance and its break may lead to formation of strong up wave. The wave’s targets will be in the area 1.3114 and 1.3141. The most relevant level of resistance to break medium-term down trend for the pair is still the region of 1.3165.
30-day moving average is still parallel to 50-day moving average and both are at the same level, pointing to equal struggle between buyers and sellers.
In case of the next attempt of the sellers to back the EUR/USD pair lower the figure 30, the level of 1.3045will serve as support. Thus, it may lead to the growth of sales, as it happened twice before it, to the level of 1.3015. If it is broken and may lead to the euro drops to new week’s lows in the area 1.2983 and 1.2943.
Bollinger Bands depicts low market volatility. The trading is in upper part of the channel and median line, placed in the area 1.3047 serves as dynamic level of support.
MACD indicator continues swinging around zero point and I do not recommend paying attention to the indicator. While the pair is trading in the range we may continue trading from strong levels upwards and downwards.
Today’s key level of support and resistance:
Level of support: 1.3045, 1.3015, 1.2983
Level of resistance: 1.3087, 1.3114, 1.3141
50-day Moving Average (yellow line) – 1.3057
30-day Moving Average (green line) – 1.3053
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