Current trend

The EUR/USD pair is correcting at 1.1134 after yesterday’s decline, which led to a renewal of the lows of August 23.

Investors focus on German macroeconomic statistics. The Q2 gross domestic product (GDP) changed from 0.2% to –0.1% MoM, justifying analysts’ forecasts, leading to zero annual dynamics compared to –0.2% YoY earlier. Thus, the German economy is close to recession, confirmed by the September Gfk Group consumer climate indicator decrease from –18.6 points to –22.0 points. Inflation data is due in the afternoon. Analysts expect the consumer price index to decrease from 2.3% to 2.1%, which will not be able to support the country’s economy. Meanwhile, Dutch Central Bank Governor Klaas Knot said the European Central Bank (ECB) could gradually cut interest rates if inflation continues to slow. However, the ECB needed more positive data before making such a decision in September. He added that the regulator expects the rate to consolidate around 2.0% in late 2025.

The American dollar retreated from a year’s low, trading at 100.80 in USDX. It is supported by the Mortgage Business Association (MBA) report on the 30-year mortgage rate, which fell from 6.50% to 6.44%, the lowest since April 2023, confirming expectations for a decline in the main indicator in September. Against this background, the mortgage market index rose from 225.8 points to 226.9 points, and the indicator of applications for home purchases with mortgages – from 130.6 points to 131.8 points.

Support and resistance

On the daily chart, the trading instrument continues its correction, holding above the resistance line of the ascending channel with dynamic boundaries of 1.1000–1.0740.

Technical indicators strengthen the buy signal: fast EMAs on the Alligator indicator are moving away from the signal line, expanding the range of fluctuations, and the AO histogram is forming ascending bars, rising in the positive zone.

Resistance levels: 1.1190, 1.1330.

Support levels: 1.1085, 1.0950.

Trading tips

Long positions may be opened after the price rises and consolidates above 1.1190, with the target at 1.1330. Stop loss — 1.1100. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 1.1085, with the target at 1.0950. Stop loss is around 1.1092.