EUR/USD: The pair will test new local highs and go down
1. Current trend of EUR/USD
Yesterday European currency went up against the USD. Growth in the pair was provoked by strong economic data on German industrial output, which amounted to 1.2% against the forecast of 0.1%. The pair went up, breaking down resistance level of 1.3120, which triggered the increased in demand of Euro.
The pair almost reached the level of 1.3200, after that it fell and continued trading in the sideways correction near the level of 1.3155. European news is not expected today, and sharp movement in the pair is not expected either. Minor movement can be driven by British news. Tomorrow attention should be paid to German data on imports and exports. Experts believe that these indices will grow.
2. Important levels (support and resistance)
Due to unexpectedly strong economic data from Germany, the pair strengthened and at the moment traded at the level of 1.3160. The pair may continue to grow due to positive German data at the end of this week and will probably reach key resistance level of 1.3250. However, the growth will be only temporarily and in future the pair will decline. Expected levels in the medium-term are 1.3200 (1.3250), 1.3120 and 1.3000.
3. Best entry/exit points
It is advisable to place short positions with profit taking at the level of 1.3000 (1.2950). it is also recommended to place short pending orders at the level of 1.3200 (1.3250) with profit taking at the level of 1.3000.
4. Supporting facts
On the daily chart Ichimoku indicator confirms the forecast, it is highly probable that the pair will go down to the bottom limit of the cloud, which coincides with important resistance level of 1.2950 (1.2900), after that the pair will push off from the upper limit of 1.3250.
Analyst of LiteForex Group of Companies