The last two weeks, trading on currency majors has been very active. At the same time, an unidirectional trend is not observed. The dollar index (#DX) is in a sideways trend. During this period, a key range of 94.50-95.50 has been formed. Financial market participants are still concerned about the trade conflict between the US and China, as well as the unstable situation in the markets of developing countries. The White House considers the introduction of new duties on Chinese goods, which will cause a further escalation of the trade conflict. At the moment, investors expect additional drivers.
This week, a number of important economic reports from the US will be published, which will have a significant impact on the dynamics of currency majors in a short term. This statistics may also affect the Fed views regarding further monetary policy.
On Thursday, September 06, the index of economic activity in the US non-manufacturing sector from ISM will be published at 17:00 (GMT+3:00). Experts expect that in August the indicator will increase by 1.9% to 56.8. On Friday, September 07, investors will assess a report on the labor market - 15:30 (GMT+3:00). It is expected that the number of employed in the nonfarm sector of the country will accelerate by 34,000 to 191,000. The increase in the average hourly earnings (m/m) and the unemployment rate will remain unchanged at the levels of 0.3% and 3.9%, respectively. We recommend paying attention to the difference between the actual and forecasted values of the indicators.
- Support levels: 1.15300, 1.14350, 1.13650
- Resistance levels: 1.16250, 1.17200
At the moment, the bearish sentiment is prevailing on the EUR/USD currency pair. The trading instrument has updated local extremes. The key support and resistance levels are 1.15300 and 1.16250, respectively. Indicators point to the power of sellers:
- the price has fixed below 50 MA and 200 MA;
- the MACD histogram has moved to the negative zone and continues to decline.
Nevertheless, we recommend opening positions from the key levels.
If economic reports from the US turn out to be positive, we expect further correction of the EUR/USD currency pair. In the medium term, quotes can test the 1.14500-1.14000 mark again.
An alternative may be the EUR/USD currency pair recovery to the round level of 1.17000.
Confirmations and entry points to the market should be looked for on lower timeframes. When following the positions, we recommend using a trailing stop.