The euro continues to demonstrate compelling strength versus the U.S. dollar and gained ground against the greenback, reaching the resistance at 1.0730. At the time of writing, the bulls are struggling to overcome this critical resistance, where a confirmed breach could be considered as a reversal signal of the long-term downtrend, and the recovery would most probably continue towards the next key resistance at 1.0800. If the buyers overcome this psychological level, then we could expect a further increase towards 1.0925. However, in case the zone at 1.0800 withholds the bullish pressure, then a consolidation in the range of 1.0641 – 1.0800 will be the most likely scenario. Despite the positive sentiment, the current levels could be considered as a great opportunity for the sellers to re-enter the market, and if this happens, we might witness a retracement towards the support zone at 1.0600. Higher volatility can be expected when the core PCE deflator and personal income for the U.S. are both announced at 12:30 GMT.
The forecasts for today’s trading session are for the pair to consolidate within the range of 127.60 – 126.46 as the downward movement was limited to the support zone at 126.46. A confirmed breach of the lower border of the range may lead the pair towards a test of the next support level at 125.86. In the opposite direction, a successful breach of the resistance at 127.60 would probably nudge the pair towards a test of the key resistance at 128.10.
The pair is headed towards a test of the critical resistance level at 1.2624, and if the bulls do not lose momentum and successfully violate this zone, then the next target would be the resistance at 1.2760. However, if the bears manage to regain control, then a corrective move towards the support at 1.2500 could take place instead. Considering the complex economic situation, the pair may enter a consolidation phase in the range of 1.2624 – 1.2500 as the market participants are still cautious and expect news regarding the conflict between Ukraine and Russia before taking a decision on whether to take a short or a long position.
During yesterday’s trading session, the German index significantly increased its value, reaching the resistance level of 14278. This level managed to twice resist the bullish pressure since the beginning of this month, and another rebound from this resistance zone would suggest a decrease in the price and a test of the support at 14150. A confirmed breach of the mentioned support may lead to a further depreciation towards the support at 13870.
The attack of the bulls was thwarted by the critical resistance at 32744, and at the time of writing this analysis, the buyers seem to lose momentum. The expectations for today’s trading session are for trading to remain below this level, and therefore a decline towards 32200 seems to be the most reasonable scenario. In case the price reaches the mentioned level, then the buyers would most probably take the chance to re-enter the market and head the price towards another test of the critical resistance at 32744.