Current trend

The EUR/USD pair shows near-zero dynamics, holding near 1.0875 and waiting for new drivers to appear on the market.

Investors continue to evaluate the preliminary June data on inflation in the euro area. The Consumer Price Index on a monthly basis rose from 0.0% to 0.3%, and on an annual basis it fell to the lows of January 2022 from 6.1% to 5.5%, while experts expected 5.6%. In turn, the Core CPI on a monthly basis corrected from 0.2% to 0.3% instead of the projected 0.7%, and on an annual basis it went up from 5.3% to 5.4%, falling short of the expected 5.5%. In general, inflationary pressures in the euro area remain stable, while the pace of growth in prices for essential goods is even accelerating.

The day before, the single currency showed a moderate decline, reacting to the emergence of data from Germany, which reflected a decrease in Exports by 0.1% in May after the index added 1.2% in April, while analysts expected -0.5%, and Imports rose by 1.7% after falling by 1.7% a month earlier, while an increase of 3.1% was expected. Against this backdrop, Germany's Trade Surplus in May fell from 18.4 billion euros to 14.4 billion euros, while analysts had expected a figure of 17.0 billion euros.

The focus of investors today will be statistics on S&P Global Services PMI: forecasts suggest that the indicator will remain at 52.4 points in June. Also during the day May data on the dynamics of producer prices are expected to be released.

In addition, investors today will evaluate the minutes of the US Federal Reserve, from which they expect more evidence in favor of further tightening of monetary policy. Currently, more than 87.0% of analysts expect that in July the interest rate will be increased by 25 basis points to 5.50%.

Support and resistance

On the D1 chart, the Bollinger Bands are gradually reversing into a descending plane. The price range expands from below, making way for new local lows for the "bears". MACD is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic shows oscillatory dynamics in the middle of its area, indicating a mixed nature of trading in the ultra-short term.

Resistance levels: 1.0891, 1.0930, 1.0969, 1.1000.

Support levels: 1.0850, 1.0800, 1.0765, 1.0700.

Trading tips

Short positions may be opened after a breakdown of 1.0850 with the target at 1.0765. Stop-loss — 1.0891. Implementation time: 2-3 days.

A rebound from 1.0850 as from support followed by a breakout of 1.0891 may become a signal for opening new long positions with the target at 1.0969. Stop-loss — 1.0850