EUR/USD

EUR/USD: Investors are still focused on the US-Chinese trade conflic

Current trend. The pair started the week with a slight increase but has not yet managed to consolidate above 1.1413 (Murrey [3/8]).

Investors are still focused on the US-Chinese trade conflict. Parties' hopes to conclude an agreement within the G20 meeting disappeared after comments by US Secretary of Commerce Wilbur Ross and Vice President Mike Pence. Ross noted that the US administration intends to further increase tariffs on Chinese exports, and, at the meeting of President Donald Trump and Chairman Xi Jinping, only a framework agreement can be concluded. During the last APEC summit, Mike Pence stated that the US could double the existing duties on Chinese goods and "would not change course until China changes its ways”.

European investors are also alert focusing on the Italian budget and Brexit. The European Commission will have to decide what to do with the Italian authorities, who refused to reduce the budget deficit for the next year (2.4%), and British Prime Minister Theresa May will have to get parliamentary approval for the deal with the EU.

Support and resistance

Now the instrument is testing the level of 1.1413 near the upper border of the downward channel, from which it can reverse and go down to 1.1352 (Murrey [2/8]), 1.1291 (Murrey [1/8]) and 1.1230 (Murrey [0/8]). Serious growth may occur if the price consolidates above 1.1474 (the midline of Bollinger Bands, Murrey [4/4]). In this case, the targets of the “bulls” will be 1.1535 (Murrey [5/8]) and 1.1596 (Murrey [6/8]), but so far the reversal seems more likely.

Support levels: 1.1413, 1.1352, 1.1291, 1.1230.

Resistance levels: 1.1474, 1.1535, 1.1596.

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Trading tips

Short positions may be opened from 1.1400 or after the reversal at 1.1474 with targets at 1.1352, 1.1291, 1.1230 and stop loss at 1.1440 and 1.1500, respectively.

Long positions may be opened above 1.1474 with targets at 1.1535, 1.1596 and stop loss at 1.1430.

Implementation period: 4-5 days.

 

Scenario

Timeframe Weekly
Recommendation SELL STOP
Entry Point 1.1400
Take Profit 1.1352, 1.1291, 1.1230
Stop Loss 1.1440
Key Levels 1.1230, 1.1291, 1.1352, 1.1352, 1.1474, 1.1535, 1.1596

 

Alternative scenario

 

Recommendation BUY STOP
Entry Point 1.1480
Take Profit 1.1535, 1.1596
Stop Loss 1.1430
Key Levels 1.1230, 1.1291, 1.1352, 1.1352, 1.1474, 1.1535, 1.1596

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