The current dynamics

The EUR/USD pair is showing mixed dynamics, remaining close to the 1.0480 level: market activity remains rather low after active trading the day before, which, however, did not lead to any significant changes in the instrument. Thus, yesterday, the euro reacted with a notable increase to the statements of the newly elected US President Donald Trump about his readiness to increase import tariffs on products from China, Mexico and Canada without mentioning the EU, which may indicate a softening of his initial election position, which previously also suggested an increase in trade tensions with the EU.

Today at 15:30 (GMT 2), investors' attention will be focused on the final statistics from the US on the dynamics of gross domestic product (GDP) in the third quarter: analysts expect no changes compared to the previous estimate at 2.8%. In addition, October data on the dynamics of orders for durable goods and the volume of personal income and expenditure of American households will be presented, as well as statistics on the personal consumption expenditure price index, which is a key indicator of inflation for the US Fed.

Tomorrow at 15:00 (GMT 2) the market in Germany will receive the inflation report: according to forecasts, the consumer price index will decrease by 0.2% in monthly terms, after having increased by 0.4% in the previous month, and in annual terms it will be set at 2.0%. In addition, a series of speeches by representatives of the European Central Bank (ECB), including Frank Elderson and Philip Lane, will be held.

Investors are currently focused on the rhetoric of the authorities. Thus, ECB Governing Council member Mário Centeno believes that the regulator needs to return the cost of borrowing to the neutral range, reducing the value to the 2.0% area with moderate paces by 25 basis points. However, the official previously noted that a faster easing of monetary parameters in December may be justified in order to support the region's economy and, as a result, achieve the regulator's main objective, namely to slow inflation below 2.0%, which, according to Centeno, confirms the effectiveness of monetary and credit policy. Most market experts share the same view, suggesting that at the last meeting of this year, officials of the European department will decide to adjust the reference rate to the 3.00% area, despite the statistics recording a decline in business activity in the industrial sector: in November, the index fell from 46.0 points to 45.2 points, although no changes are expected.

Support and resistance levels

On the daily chart, the Bollinger Bands indicator lines are showing a steady decline: the price range is narrowing, indicating the emergence of mixed dynamics in the ultra-short term. The MACD has reversed in the upward direction and formed a new buy signal (the histogram is above the signal line). The Stochastic shows a similar trend, but the line of this indicator is rapidly approaching the "80" mark, indicating the risks of overvaluation of the single currency in the ultra-short term.

Resistance levels are: 1.0500, 1.0530, 1.0561, 1.0600.

Support levels are: 1.0450, 1.0400, 1.0350, 1.0300.

The trading scenario

Short positions may be opened after the level of 1.0450 is firmly broken down with the target at 1.0350. Place Stop Loss — 1.0500. The term of realization is: 2-3 days.

The rebound from the 1.0450 level as a support with a successive break of the 1.0500 level upwards may become a signal to open new long positions with the target at 1.0600. Place Stop Loss — 1.0450.