Review and dynamics
Since the opening of European session today the pair EUR/USD is slowly declining.
In anticipation of the interest rate decisions by the Bank of England, traders prefer to open long positions on the Pound and Euro against the USD.
However, the pair EUR/USD remains in the ascending channel on 4-hour, daily and weekly channels.
On the weekly channel the upper limit is near the levels of 1.1785 (Fibonacci 38.2%) and 1.1900 (ЕМА144).
Since Tuesday, when the pair reached new annual highs at the level of 1.1615, and when a pin-bar was developed on the daily chart, the pair EUR/USD fell to support level of 1.1370 (ЕМА144 on 4-hour chart and lower limit of the ascending channels on 4-hour and daily charts).
On the daily and 4-hour charts the indicators OsMA and Stochastic give mixed signals.
On the daily chart the indicators are reversing towards the long positions, while on 4-hour chart the indicators give signal for the short positions. From technical point of view it makes sense to wait until indicators on 4-hour change and resume buy trades. In this case pending orders to buy can be places at support levels of 1.1370 (ЕМА144), 1.1345 (ЕМА200 on 4-hour chart).
However, do not forget about today’s decisions of the Bank of England. Volatility in the market can be high. If the pair EUR/USD declines, these levels may be broken. In this case the pair EUR/USD may fall to support level of 1.1285 (Fibonacci 23.6% to the last wave of decline from the highs of 2014). Breakout of this level will trigger further decline to support level of 1.1180 (ЕМА200 on the daily chart).
Long positions are preferable. After breaking out resistance level of 1.1485 (highs of October 2015) the pair may go up to the levels of 1.1615, 1.1700, 1.1785 (Fibonacci 38.2%), 1.1900 (ЕМА144 on the weekly chart).
Support levels: 1.1370, 1.1345, 1.1285, 1.1260, 1.1220, 1.1180 and 1.1100.
Resistance levels: 1.1460, 1.1485, 1.1535, 1.1615 and 1.1700.
Sell Stop: 1.1390. Stop-Loss: 1.1420. Targets: 1.1370, 1.1345, 1.1285, 1.1260 and 1.1180.
Buy Stop: 1.1440. Stop-Loss: 1.1390. Targets: 1.1485, 1.1535, 1.1615, 1.1700 and 1.1900.
In the ascending channel
The indicators are reversing towards the buy trades