Current trend

The EUR/USD pair is developing a downward trend, continuing the "bearish" impetus formed the day before. The instrument is testing 1.0910 for a breakdown, while trading participants expect new movement drivers to emerge. In addition, investors are still assessing the eurozone Retail Sales statistics released yesterday.

Thus, in June, sales fell by 0.3% after growing by 0.1% in the previous month, while analysts expected –0.1%, and in annual terms the indicator fell by 0.3% with a forecast of 0.1%, while in May sales volumes increased by 0.5%. The dynamics of Factory Orders in Germany, statistics for which were also published the day before, turned out to be mixed: in annual terms, the indicator fell from –8.6% to –11.8%, but in monthly terms it increased by 3.9% after –0.6%, while experts expected 0.8%. In turn, the Sentix Investor Confidence index in the eurozone fell from –7.3 points to –13.8 points in August, reaching its lowest level since January, the Current Situation index fell from –15.8 points to –19.0 points, the lowest level since February, and the Expectations Index fell from 1.5 points to –8.8 points, also falling to its lowest level since December last year. Analysts say the eurozone's economic slowdown is likely to put pressure on the European Central Bank's (ECB) decisions on the timing of its borrowing cost cuts. Investors now expect the regulator to be more aggressive in addressing the region's economic weakness, although the Sentix indicator does not point to a sustained slowdown in inflation.

Today, market participants are assessing the June statistics on Industrial Production in Germany: the indicator increased by 1.4% after –2.5% in the previous month, while analysts expected 1.0%. Tomorrow at 14:30 (GMT 2), the US will present data on the dynamics of jobless claims: Initial Jobless Claims for the week ended August 2 may decrease from 249.0 thousand to 240.0 thousand.

Support and resistance

On the D1 chart Bollinger Bands are trying to reverse horizontally. The price range is expanding, being spacious enough for the current activity level in the market. MACD indicator is trying to reverse into the descending plane, keeping the previous buy signal (located above the signal line). Stochastic has approached the level of "80" and reversed into a downward plane, signaling in favor of the development of a "bearish" corrective trend in the ultra-short term.

Resistance levels: 1.0930, 1.0964, 1.1000, 1.1050.

Support levels: 1.0900, 1.0869, 1.0844, 1.0820.

Trading tips

Short positions may be opened after a breakdown of 1.0900 with the target at 1.0844. Stop-loss — 1.0930. Implementation time: 1-2 days.

A rebound from 1.0900 as from support followed by a breakout of 1.0930 may become a signal for opening new long positions with the target at 1.1000. Stop-loss — 1.0900.