Current trend

During the Asian session, the EUR/USD pair holds around 1.0928. Investors are in no hurry to open new positions, preferring to wait for the results of the European Central Bank (ECB) monetary policy meeting today at 14:15 (GMT 2).

Experts believe the regulator’s officials will back up the June interest rate cut by 25 basis points with another adjustment in September and will continue to reduce borrowing costs quarterly. The head of the department, Christine Lagarde, has repeatedly emphasized the need to analyze macroeconomic data when making decisions. In June, economists revised the inflation forecast upward, and now the expected consumer price index is 2.5% in 2024 and 2.2% in 2025, and the core indicator is 2.8% and 2.2%, respectively. The June value remained at 0.2% MoM and decreased from 2.6% to 2.5% YoY, while the core indicator consolidated at 0.4% MoM against preliminary estimates of 0.3% and 2.9% YoY. Despite this, amid risks associated with the growth of consumer prices in the services sector, ECB officials may become more cautious in adjusting the monetary policy. Surveys continue to signal a slowdown in core wage growth below 4.0% by the end of the year, allowing the financial authorities to achieve the inflation target of 2.0% in the first half of 2025.

Yesterday, investors paid attention to real estate market data. The building permits increased by 3.4% to 1.446M, and housing starts by 3.0% to 1.353M, confirming the pace of the sector’s recovery against an imminent adjustment of the US Fed’s interest rates. Now, the Chicago Mercantile Exchange (CME) FedWatch Instrument estimates its reduction probability at the September 18 meeting at 93.5%.

Support and resistance

The trading instrument has been rising for the third week, leaving a long-term downward channel and reaching the five-month high at 1.0945 (Fibonacci correction 50.0%). After a breakout, the price may reach the area of ​​1.0986 (Murrey level [4/8]) and 1.1047 (Murrey level [5/8]). In case of a breakdown of 1.0803 (Murrey level [1/8]), supported by the middle line of Bollinger Bands, the price will return to the downward channel and may reach the area of ​​1.0742 (Murrey level [0/8]) and 1.0645 (Fibonacci correction 38.2%).

Technical indicators confirm an upward trend. Bollinger Bands are directed upwards, and the MACD histogram is increasing in the positive zone. However, Stochastic has entered the overbought zone, which does not exclude a limited correction.

Resistance levels: 1.0945, 1.0986, 1.1047.

Support levels: 1.0803, 1.0742, 1.0645.

Trading tips

Long positions may be opened above 1.0945, with the targets at 1.0986, 1.1047, and stop loss 1.0915. Implementation period: 5–7 days.

Short positions may be opened below 1.0803, with the targets at 1.0742, 1.0645, and stop loss 1.0785.