Current trend

During the Asian session, the EUR/USD pair is trading around the 1.0985 mark.

The negative dynamics of the euro, which may become a trend, are developing against poor macroeconomic statistics. Thus, the Q2 gross domestic product (GDP) of Italy adjusted by –0.3% compared to 0.6% earlier, which led to a decrease in the annual value from 1.9% to 0.6% and was reflected in the composite indicator of the EU countries, the growth of which slowed down to 0.3% QoQ and from 1.1% to 0.6% YoY. The July German manufacturing PMI decreased from 40.6 points to 38.8 points, however, the unemployment rate in the country decreased from 5.7% to 5.6% due to a change in the number of unemployed by –4.0K compared to 30.0K earlier.

The US dollar is correcting around 101.900 in the USD Index, despite a poor JOLTS report from the labor market: in June, the number of open vacancies decreased to 9.582M from a revised May value of 9.616M although analysts expected an increase to 9.610M. July manufacturing PMI from the Institute of Supply Management (ISM) increased from 46.0 points to 46.4 points, not meeting forecasts of 46.8 points.

Support and resistance

On the daily chart, the trading instrument is correcting within the global ascending corridor with dynamic boundaries 1.1300–1.0750.

Technical indicators hold a buy signal, but a trend change may occur soon: fast EMAs on the Alligator indicator narrow the range of fluctuations, approaching the signal line, and the AO histogram forms downward bars, approaching the transition level.

Resistance levels: 1.1068, 1.1230.

Support levels: 1.0920, 1.0740.

Trading tips

Short positions may be opened after the price drops and consolidates below 1.0920 with the target at 1.0740. Stop loss – 1.1000. Implementation period: 7 days or more.

Long positions may be opened after the price rises and consolidates above 1.1068 with the target at 1.1230. Stop loss – 1.1000.