Current trend

The EUR/USD pair shows moderate growth during the Asian session, developing the "bullish" momentum formed the day before. At the moment, the instrument is testing the level of 1.0980 for a breakout, waiting for new drivers to appear to strengthen the upward movement.

The focus of investors' attention is the key macroeconomic statistics from the US on the dynamics of consumer inflation. The current forecasts suggest a possible acceleration of the annual value from 3.0% to 3.3%, while the monthly rate is likely to remain at the same level of 0.2%. Core inflation is also expected to be unchanged from the initial estimate of 0.2% MoM and 4.8% YoY. Also today, traders will monitor the data on the dynamics of Initial and Continuing Jobless Claims, and by the close of the afternoon session, the US Federal Reserve will publish a monthly report on the state of the budget, where, according to preliminary estimates, a decrease in the deficit from -228.0 billion dollars to -92.5 billion dollars may be recorded.

During the day, the publication of updated July statistics on consumer inflation in Italy and a monthly economic bulletin from the European Central Bank (ECB) is expected. The document contains a summary of economic and financial information on the state of the region's economy, as well as a block describing the upcoming trends, which can help with forecasts regarding future monetary policy.

Meanwhile, Bloomberg analysts predicted a 5.0% decline in the eurozone's Gross Domestic Product (GDP) next year. The negative dynamics, in their opinion, will intensify against the backdrop of a long course of tightening monetary incentives, the effect of which will be observed in the future, as well as against the backdrop of rising energy costs. The co-author of the study, Jamie Rush, notes that the ECB's "hawkish" policy will put the most serious pressure on states with high debt obligations and budget constraints. Earlier, the ECB President, Christine Lagarde, said that the economic outlook for the eurozone worsened due to weakening domestic demand and high inflation.

Support and resistance

On the daily chart, Bollinger Bands are gradually reversing into a horizontal plane. The price range is narrowing from above, reflecting the emergence of multidirectional trading dynamics in the short term. MACD indicator is trying to reverse upwards and form a new buy signal (the histogram has to consolidate above the signal line). Stochastic keeps its downward direction and does not react to an attempt to resume growth. Traders should wait for the signals from the technical indicator to be clarified.

Resistance levels: 1.1000, 1.1050, 1.1100, 1.1150.

Support levels: 1.0969, 1.0930, 1.0891, 1.0850.

Trading tips

Long positions can be opened after a breakout of 1.1000 with the target of 1.1100. Stop-loss — 1.0950. Implementation time: 2-3 days.

A rebound from the level of 1.1000 followed by a breakdown of 1.0969 may be a signal to open short positions with the target at 1.0891. Stop-loss — 1.1010.