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EUR / USD updated 2-week highs

Oct 10 2019, 03:38 PM (+06) |

The pair EUR / USD today is trading with an increase of 0.35% amid a weakening dollar and is ignoring another batch of weak statistics from the Eurozone.

According to information released today, in August, industrial production in France fell by 0.9%, with a forecast of + 0.3%. Compared to the same period last year, production decreased by 1.4%. The decrease in production in the manufacturing industry amounted to 0.8% against the forecast of + 0.3%. Over the year, the decline was 1.6%. This report confirms the persistence of negative trends in the manufacturing sectors of the leading EU economies. Against the background of the publication of weak data from France, Germany and other countries, we can expect a decrease in forecasts for the Eurozone GDP growth rates in the 3rd and 4th quarters.

But due to the global weakening of the dollar (the dollar index fell 0.21% from the beginning of the day), the EUR / USD pair was able to update its two-week highs and is now trying to gain a foothold above 1.10. The pressure on the US currency is exerted by increased expectations of investors regarding further easing of monetary policy in the United States and conflicting news about trade negotiations between the United States and China.

Today it is worth paying attention to the publication of the US inflation report. These data have a great influence on the decisions taken by the Fed on interest rates.

On the chart, the long-awaited breakthrough of resistance at 1.0995 took place. Now the bulls can expect growth to 1.1025, where we can expect the formation of local reversal signals and a pullback.

Resistance levels: 1.1025, 1.1085, 1.1160.

Support levels: 1.0970, 1.0945, 1.0890.

The main scenario is an increase to 1.1025 and a rollback to 1.0970.

An alternative scenario is the formation of a retreat to 1.0970 from current levels.

A mixed news background has been formed on the market. On the chart, in the medium term there is a priority in the direction of the upward movement development, but possible longs should be considered only after the pullback movement to the level of 1.0970. Therefore, in the short term, shorts from 1.1010 and 1.1025 can be considered.

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