EUR/USD: THE EURO DEVELOPS THE "BEARISH" IMPETUS FORMED THE DAY BEFORE

Current trend

The EUR/USD pair shows a moderate decline, developing a weak "bearish" momentum formed the day before. The instrument is testing 1.0740 for a breakdown, while investors are expecting new drivers for the movement of quotes.

Trading participants today assess the March statistics on Industrial Production in Germany: the figure on a monthly basis lost 0.4% after growing by 1.7% in the previous month, while analysts expected -0.6%, and in annual terms the rate of decline slowed down from -5.3% to -3.3%. In addition, data released to the market yesterday showed a decline in Factory Orders of 0.4% month-on-month and 1.9% year-on-year after -0.8% and -8.8%, respectively. The indicator fell for the second month in a row, confirming a slower economic recovery in Germany than expected. At the same time, Export volumes in March added 0.9% after -1.6% in the previous month with a forecast of 0.4%, and Imports slowed down sharply from 3.0% to 0.3% with expectations of -1.0%, bringing the trade surplus to 22.3 billion euros. The single currency was provided with some support by statistics on Retail Sales in the eurozone: in March, the indicator increased by 0.8% month-on-month and 0.7% year-on-year, which turned out to be significantly better than the previous indicator values of -0.3% and -0.5%, respectively.

Support and resistance

Bollinger Bands in D1 chart show moderate growth. The price range is narrowed, being spacious enough for the current activity level in the market. MACD is growing preserving a weak buy signal (located above the signal line). The indicator is also trying to consolidate above the zero level. Stochastic, having approached the level of "80", reversed into a descending plane, responding to the emergence of a "bearish" trend at the beginning of the week.

Resistance levels: 1.0765, 1.0800, 1.0820, 1.0842.

Support levels: 1.0730, 1.0700, 1.0660, 1.0630.

Trading tips

Short positions may be opened after a breakdown of 1.0730 with the target at 1.0660. Stop-loss — 1.0765. Implementation time: 2-3 days.

A rebound from 1.0730 as from support followed by a breakout of 1.0765 may become a signal for opening new long positions with the target at 1.0820. Stop-loss — 1.0730.