Current trend

The EUR/USD pair is testing 1.0700 for a breakdown, preparing to reach the April low of 1.0613 after the publication of macroeconomic data from Germany.

Thus, in June, the business expectations index was 89.0 points, below the forecast of 91.0 points and 90.3 points earlier, while the assessment of the current situation remained at 88.3 points relative to expectations of 88.4 points. The business climate index from the Institute for Economic Research (IFO) decreased from 89.3 points to 88.6, although experts expected 89.4 points, putting pressure on the euro. In addition, Olli Rehn, the head of the Central Bank of Finland, said that market expectations that the European Central Bank (ECB) will cut interest rates twice more this year to 2.25% are reasonable and that it was better not to excessively restrain the EU economic activity to ensure that inflation returns to the 2.0% target.

The US macroeconomic statistics support the American dollar. The June Conference Board consumer confidence index was 100.4 points, better than the forecast of 100.0 points. Today at 16:00 (GMT 2), data on new home sales is due, which may increase by 2.9% in May, acting as a driver of the downward movement in the EUR/USD pair, with the target at 1.0613.

Support and resistance

The long-term trend remains downward. On June 13, the price broke through the support level of 1.0760, and it became a resistance level, where the quotes reversed and declined to the June low of 1.0670. The price may move to the area of ​​1.0613 and 1.0460.

The medium-term trend is downward. Last week, the asset consolidated below the zone of 1.0748–1.0731 and headed to 1.0580–1.0563. Short positions are relevant within the correction from the key trend resistance area of ​​1.0852–1.0835, with the target at the June low of 1.0670.

Resistance levels: 1.0760, 1.0890, 1.0976.

Support levels: 1.0670, 1.0613, 1.0460.

Trading tips

Short positions may be opened below 1.0670, with the target at 1.0613 and stop loss 1.0695. Implementation period: 9–12 days.

Long positions may be opened above 1.0760, with the target at 1.0850 and stop loss 1.0720.