Current trend

The EUR/USD pair is showing a slight decline, developing the corrective impetus formed the day before, when the instrument retreated from the local highs of February 22. Quotes are testing 1.0830 for a breakdown, while investors expect new drivers to emerge.

In particular, today the EU will publish February statistics on the level of sentiment in the economy, which, however, is unlikely to significantly affect the dynamics of the instrument. However, the Economic Sentiment Indicator is expected to strengthen from 96.2 points to 96.7 points, Consumer Confidence may remain at -15.5 points, and the Services Sentiment indicator may rise from 8.8 points to 9.0 points. Earlier, investors paid attention to data on lending in the eurozone: in January, Private Loans was 0.3%, which is less than 0.4% in December, and the figure in the business sector slowed down from 0.5% to 0.2%. Overall, the indicator increased at its slowest pace since 2016 as financial institutions come under pressure from high interest rates from the European Central Bank (ECB). Investors expect the start of monetary policy easing, which will support the banking sector and contribute to economic recovery.

Tomorrow, February inflation data will be presented in Germany, France and Spain. In Germany, the monthly dynamics of the Consumer Price Index is expected to accelerate from 0.2% to 0.5%, and in annual terms, a decrease from 2.9% to 2.6% is projected. In France, the CPI harmonized with EU standards may slow down from 3.4% to 3.0%.

In addition, on Thursday the market will receive American statistics on Personal Consumption Expenditures - Price Index, which is an important indicator that the US Federal Reserve uses when calculating the average dynamics of inflation in the country. In annual terms, the index is projected to decrease from 2.6% to 2.4%, and in monthly terms it is expected to increase from 0.2% to 0.3%.

Support and resistance

In the D1 chart, Bollinger Bands are reversing horizontally. The price range expands from above, freeing a path to new local highs for the "bulls". MACD is growing preserving a buy signal (located above the signal line). The indicator is also trying to consolidate above the zero level. Stochastic, having rebounded from the level of "80" last week, maintains a fairly active decline and is currently located approximately in the center of its area.

Resistance levels: 1.0838, 1.0865, 1.0900, 1.0930.

Support levels: 1.0820, 1.0800, 1.0765, 1.0730.

Trading tips

Short positions may be opened after a breakdown of 1.0820 with the target at 1.0765. Stop-loss — 1.0850. Implementation time: 1-2 days.

A rebound from 1.0820 as from support followed by a breakout of 1.0838 may become a signal for opening new long positions with the target at 1.0900. Stop-loss — 1.0800.