Overview and dynamics
The entire past month was marked by the strengthening of the US dollar on the currency market.
EUR/USD pair broke through the important support level 1.1180 (EMA200, EMA144 on the daily chart, EMA50 on the weekly chart), reaching a low near the level 1.1100.
However, the price returned to the level 1.1200 today in anticipation of the ECB's decision on interest rates. The strengthening of the euro also contributed to the growth of cross pair EUR/GBP amid the sharp decline of the pound after the publication of the next poll and betting offices’ results where most people bet on the exit of the UK from the EU.
In anticipation of the event of strong fundamental nature, doing technical analysis is sometimes difficult and useless. When, in December, investors felt that the ECB’s measures and M. Draghi’s words on expanding the QE program in the euro zone were not convincing enough, EUR/USD pair was up sharply by over 400 points. European stocks fell sharply amid the sales of European assets. History may repeat itself after any Mario Draghi’s careless word.
However, if we look at the daily chart of EUR/USD pair, we see that OsMA and Stochastic crossed over to the buyers. Breakdown of levels 1.1255 (EMA200 on the 4-hour chart, EMA50 on the daily chart), 1.1285 (Fibonacci level 23.6% of correction to the last downward wave from 2014 highs), 1.1300 will send the pair to the levels 1.1485, 1.1500, 1.1615 (May and year highs), with the prospect of growth to the levels 1.1700, 1.1785 (38.2% Fibonacci level), 1.1900 (EMA144 on the weekly chart).
The alternative scenario implies a return to the downward trend that resumed last month after the breakdown of support levels 1.1180, 1.1100 (May lows and lower limit of a new channel that has formed on the daily chart).
OsMA and Stochastic on the weekly chart signal short positions.
Support levels: 1.1180, 1.1100, 1.1050
Resistance levels: 1.1255, 1.1285, 1.1300, 1.1335, 1.1400, 1.1485, 1.1535, 1.1615
Sell Stop 1.1170. Stop-Loss 1.1210. Targets 1.1100, 1.1050, 1.1000, 1.0900, 1.0800
Buy Stop 1.1230. Stop-Loss 1.1170. Targets 1.1255, 1.1285, 1.1300, 1.1400, 1.1485, 1.1500, 1.1600
In the upward channel
At the level 1.1180