Current trend

The EUR/USD pair is correcting after a “bearish” start to the week, renewing local lows of July 4 and trading at 1.0825.

Positive macroeconomic statistics failed to support the asset. The Q2 gross domestic product (GDP) in France remained at 0.3% QoQ, slowing to 1.1% from 1.5% YoY, the Spanish figure was 0.8% QoQ and changed from 2.6% to 2.9% YoY. As analysts expected, negative values ​​were recorded in Germany, reaching –0.1% QoQ and –0.1% YoY. However, the EU composite indicator reached 0.3% QoQ and increased from 0.4% to 0.6% YoY, marking the fastest pace since August 2023. Thus, a recession in the EU economy is not expected this year, and the European Central Bank (ECB) officials may discuss cutting interest rates soon.

The American dollar is trading at 104.00 in USDX. Today at 20:00 (GMT 2), the results of the US Fed meeting are due. Experts estimate the probability of changes in monetary policy parameters as the lowest this year. According to the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of keeping the interest rate at 5.25–5.50% is 95.6%. However, markets are hoping that the authorities will signal a –25 basis point adjustment during the September meeting, and investors are counting on one or two similar reductions by the end of the year.

Support and resistance

On the daily chart, the trading instrument is correcting, retreating from the resistance line of the ascending channel with dynamic boundaries of 1.0950–1.0700.

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

Resistance levels: 1.0850, 1.0940.

Support levels: 1.0800, 1.0720.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.0800, with the target at 1.0720. Stop loss — 1.0850. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.0850, with the target at 1.0940. Stop loss — 1.0800.