Current trend

The euro shows ambiguous trading dynamics in the EUR/USD pair during the Asian session, consolidating near the level of 1.2220.

Today’s report on consumer prices in the EU will largely determine the local trend: analysts expect that the June figure will increase by 0.3%, leading to the slowdown in the value from 6.1% to 5.5% YoY. With a similar expected monthly increase in the core indicator, which does not consider the cost of food and fuel, the index may rise from 5.3% to 5.4% YoY, which may cause insufficient investors’ support for the single currency. The European Central Bank (ECB) interest rate has already reached 4.00%, and the next adjustment is expected on July 27, while there is no significant reduction in core inflation, putting pressure on the region’s economy.

The US dollar corrects below 100.000 in the USD Index. Yesterday’s macro data disappointed investors as industrial output fell 0.5% MoM in June and from 0.03% to –0.43% YoY, while the manufacturing sector corrected by –0.3% after –0.2% earlier. Today, data on the housing market will be published: if the indicator of house construction shows a negative trend, the US currency will be under additional pressure.

Support and resistance

On the daily chart, the trading instrument is growing within the global ascending corridor with dynamic boundaries 1.1260–1.0750.

Technical indicators maintain a stable buy signal: fast EMAs on the Alligator indicator widen the oscillation range, moving away from the signal line, and the AO histogram forms upward bars, rising in the buying zone.

Resistance levels: 1.1270, 1.1430.

Support levels: 1.1130, 1.0980.

Trading tips

Long positions may be opened after the price rises and consolidates above 1.1270 with the target at 1.1430. Stop loss – 1.1200. Implementation period: 7 days or more.

Short positions may be opened after a reversal, reduction, and consolidation of the price below 1.1130 with the target at 1.0980. Stop loss – 1.1200.