EUR/USD: Trading Scenarios
Yuri Papshev | Apr 18, 2019 07:29AM ET
Weak macro data from Europe and published at the beginning of the European session on Thursday caused a weakening of the euro and a drop in the EUR/USD pair.
The preliminary PMI indexes for April were lower than expected. Eurozone production PMI was 47.8, which is below the forecast of 47.9. The compound PMI of the Eurozone was 51.3 against the forecast of 51.8.
The data presented is set to increase the likelihood of further easing of the ECB’s monetary policy.
Having broken through a strong support level of 1.1285 (ЕМА200 on the 1-hour chart, as well as a Fibonacci level of 23.6% of the correction to the fall from the level of 1.3900, which began in May 2014), EUR/USD reached a week low near the 1.1243 mark. Breakdown of this local support level will cause further weakening of EUR/USD with targets located at support levels of 1.1210 (November lows), 1.1190 (March and year lows), 1.1120, 1.1000.
An alternative scenario will be associated with a return to the zone above the resistance level of 1.1300, which will create prerequisites for a stronger upward correction to the resistance levels of 1.1390 (EMA144), 1.1440 (EMA200 on the daily chart).
Short positions are preferred.
In the period from 12:30 to 14:00 GMT, important macro data from the US will be published, which will cause an increase in market volatility. Among the published data that should be noted are the preliminary PMI business indices in the USA for April, as well as data on retail sales. Data worse than the forecast will negatively affect the dollar, which will cause its sales and fixation of long positions on it before the long weekend, associated with the meeting of the Catholic Easter.
Support Levels: 1.1250, 1.1240, 1.1210, 1.1190, 1.1120, 1.1000
Resistance Levels: 1.1285, 1.1300, 1.1390, 1.1440
Trading Recommendations
Sell Stop 1.1240. Stop Loss 1.1290. Take-Profit 1.1210, 1.1190, 1.1120, 1.1000
Buy Stop 1.1290. Stop Loss 1.1240. Take-Profit 1.1320, 1.1390, 1.1440
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.