Current trend

The EUR/USD pair is showing moderate growth, recovering from last Friday's "bearish" dynamics. The instrument is testing new local highs from October 15, while trading participants are expecting the emergence of new drivers of movement.

On Monday, the EU will publish a block of October macroeconomic statistics on business activity from S&P Global. The forecasts do not assume any changes compared to last month's figures: for example, the Manufacturing PMI in Germany is expected to be at 42.6 points, and for the eurozone as a whole — at 45.9 points. Also, during the day, speeches by representatives of the Bundesbank and the European Central Bank (ECB) are expected, who may comment on the likelihood of further changes in monetary policy in the eurozone. According to a survey by the consulting group Ernst & Young Global Ltd., 45.0% of industrial companies in the German economy, the largest in the eurozone, intend to expand their activities abroad, while only 13.0% of them are ready to continue working in the country, while 29.0% of companies plan to locate their headquarters outside Germany, compared to 4.0% who want to manage from within. Two-thirds of the managers surveyed said they expect job losses in the national economy in the coming years. 

American investors are focusing on the upcoming US presidential elections, which will take place on November 5. Republican candidate Donald Trump's position was bolstered by Friday's weak labor market report, which often serves as one of the arguments for the current administration of Joe Biden. The national economy created only 12.0 thousand Nonfarm Payrolls in October, while analysts expected 113.0 thousand. In the previous month, the data reflected an increase in the indicator by 223.0 thousand. Average Hourly Earnings accelerated in October from 3.9% to 4.0% year-on-year and from 0.3% to 0.4% month-on-month, reflecting continued moderate inflation risks in the country. Despite the initial reaction, the dollar later managed to recover, as such low employment figures were recorded against the backdrop of two major hurricanes and protests by The Boeing Co. employees.

Support and resistance

On the daily chart Bollinger Bands are trying to reverse into the ascending plane. The price range is expanding but it fails to conform to the surge of "bullish" sentiments at the moment. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic retains upward direction, but is located near its highs, which indicates risks of overbought euro in the ultra-short term.

Resistance levels: 1.0900, 1.0930, 1.0950, 1.1000.

Support levels: 1.0871, 1.0838, 1.0800, 1.0765.

Trading tips

Long positions can be opened after a breakout of 1.0900 with the target of 1.0950. Stop-loss — 1.0871. Implementation time: 1-2 days.

A rebound from 1.0900 as from resistance, followed by a breakdown of 1.0871 may become a signal for opening of new short positions with the target at 1.0800. Stop-loss — 1.0900.