Current trend

Despite the stability of EU macroeconomic statistics, the EUR/USD pair is moving in a downward trend around 1.1065.

Thus, in September, the consumer price index fell from 0.1% to –0.1% MoM and from 2.2% to 1.8% YoY, while the core indicator, which excludes fuel and food prices from calculations, fell from 0.3% to 0.1% and from 2.8% to 2.7%, respectively, justifying forecasts. A further weakening of inflationary pressure in the region increases the likelihood that European Central Bank (ECB) officials will announce an additional cut in interest rates in October, and will also decide on at least one more easing of monetary policy in November.

The American dollar retreats from year’s lows, trading at 100.80 in the USDX. The JOLTS job openings report accelerated from 7.711M to 8.040M, while experts expected a decline to 7.640M, against which the unemployment data due later does not cause such great concern as before. Despite the recovery of the employment sector, the manufacturing PMI remained at 47.2 points.

The market remains focused on the speech of the US Fed Chairman Jerome Powell at the year’s meeting of the National Association for Business Economics (NABE). He noted that the regulator would most likely continue to reduce the cost of borrowing by 25 basis points, although most experts expected an adjustment of –50 basis points at the next meeting, and promised to do everything possible to achieve a sustainable slowdown in inflation to 2.0%, preventing a significant increase in unemployment.

Support and resistance

On the daily chart, the trading instrument is correcting below the resistance line of the ascending channel with dynamic boundaries of 1.1330–1.1000.

Technical indicators are slowing down the buy signal: fast EMAs on the Alligator indicator are above the signal line, narrowing the range of fluctuations, and the AO histogram is forming correction bars in the buy zone.

Resistance levels: 1.1100, 1.1190.

Support levels: 1.1045, 1.0940.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.1045, with the target at 1.0940. Stop loss — 1.1100. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.1100, with the target around 1.1190. Stop loss — 1.1050.