Yesterday the September euro area retail sales and the Germany industrial sector orders data was the most interesting news. The sales dynamics is positive, but it unlikely will support the European currency, taking into consideration that the market is definitely guided by the Fed and the ECB multi-directional policy. Technical factors can somewhat support the single currency as the pair fell to the strong support level.
The first support is at the level of 1.0800, the next one is at 1.0730. The resistance levels are 1.0870 and 1.0925.
We have a strong and confirmed sell signal. The price is below the Ichimoku Cloud. The pair is under the Chinkou Span. The Tenkan-sen is crossing Kijun-sen upwards; two lines are forming the “Dead Cross”. The pair will show the southern movement until it is below the Cloud.
The MACD indicator is in a negative territory. The histogram is decreasing.
The pair stopped its decrease at the level of 1.0870 where it is trying to consolidate. We believe it will remain at this level till the tomorrow’s NFP. The further EUR/USD direction wholly depends on the news. The decrease target is the level of 1.0800. In case of a rebound the pair may return to 1.0870.