Current trend

Amid the decline of the American currency, the EUR/USD pair is moving in an upward trend at 1.1194 despite poor EU macroeconomic data.

Thus, the September manufacturing PMI fell from 45.8 points to 44.8 points, the services PMI from 52.9 points to 50.5 points, and the composite PMI from S&P Global from 51.0 points to 48.9 points. Despite the monetary policy easing, the economy remains under pressure, and its recovery requires either more time or a new reduction in interest rates. The German business expectations index fell from 86.8 points to 86.3 points, the business climate indicator from the Institute for Economic Research (IFO) from 86.6 points to 85.4 points, and the indicator of the assessment of the current situation – from 86.4 to 84.4 points. Tomorrow at 08:00 (GMT 2), investors will pay attention to German consumer climate data from GfK Group. According to preliminary estimates, the negative dynamics will increase from –22.0 points to –22.6 points. At 10:00 (GMT 2), consumer lending statistics are due, and at 15:30 (GMT 2), the head of the European Central Bank (ECB), Christine Lagarde, will speak, touching on the topic of further easing of monetary policy against slowing inflation.

The American dollar is falling, trading close to a yearly low of 99.90 in USDX. US Fed officials have started a cycle of interest rate cuts. However, some experts believe the measures taken were untimely, and a new downward cycle for the US economy has already begun. Thus, in addition to the negative business activity report, the September Conference Board consumer confidence index fell from 105.6 points to 98.7 points, for the first time since April below 100.0 points.

Investors focus on the comments of US Fed officials. Yesterday, Chicago Federal Reserve Bank President Austan Goolsbee, Atlanta Fed President Raphael Bostic, and Minneapolis Fed President Neel Kashkari said that the –50 basis point adjustment in borrowing costs was aimed at maintaining the emerging balance of the economy, in which inflation is approaching the target level, and unemployment is growing moderately. They noted that the current value still puts significant pressure on households and businesses, hinting at the possibility of its further reduction.

Support and resistance

On the daily chart, the trading instrument is correcting below the resistance line of the ascending channel with dynamic boundaries of 1.1330–1.1000.

Technical indicators maintain a buy signal: fast EMAs on the Alligator indicator are above the signal line, maintaining a stable fluctuation range, and the AO histogram forms correction bars in the buy zone.

Resistance levels: 1.1210, 1.1330.

Support levels: 1.1160, 1.1040.

Trading tips

Long positions may be opened after the price rises and consolidates above 1.1210, with the target at 1.1330. Stop loss is 1.1150. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 1.1160, with the target at 1.1040. Stop loss is around 1.1210.