EUR/USD: end of the week and EU summit

Current trend

The euro is strengthening amid expectations of the positive outcome of the Greek crisis on the EU summit this weekend.

Since the beginning of the trading session, the pair EUR/USD gained 100 points. The Euro is also getting support in cross-pairs against the CHF and the GBP. During the Asian session, Shanghai Composite grew by 5.2%, Shenzhen Composite by 4%, and Nikkei Stock Average by 0.6% but fell by 0.4% at the closing of the session. The Dollar index from Wall Street Journal fell by 0.13%.

However, despite the local strengthening, the ECB Quantitative Easing program and the policy tightening by the Fed limit pair growth. Therefore, in the medium-term the pair continues falling, despite the Fed’ cautious statements regarding planned interest rates hike in the US.

Important news on Friday include Unemployment level and Participation Rate in Canada, due at 3:30 pm (GMT +3), and the Fed Chair Janet Yellen speech at 7 pm (GMT +3).

On Monday, there can be a gap. All positions in the pair are recommended to be closed by the end of the day today.

Support and resistance

The pair remains under correction to the downward trend started in May 2014. 2015 lows are at 1.0480.

At present, the pair is trading near the bottom border of the upward correction channel and is heading towards resistance levels at 1.1290 (23.6% Fibonacci), 1.1380 (EMA144), 1.1600 (EMA200 on the daily chart).

The breakdown of the level of 1.1000 would open the way towards 1.0860.

OsMA and Stochastic on the 4-hour and daily charts give buy signals.

From the technical point of view, the pair is going to continue growing. The fall is going to resume from the fundamental perspective.

Support levels: 1.1000, 1.0860, 1.0720.

Resistance levels: 1.1180, 1.1235, 1.1290, 1.1380.

Trading tips

Today, a growth above 1.1135 is unlikely (the farthest level is 1.1180). Pending sell orders can be placed from these levels with targets at 1.1070, 1.1040. Recommendation length – until 3 pm (GMT +3).

Long positions can be opened after the breakout of the level of 1.1290 with targets at 1.1380, 1.1600, 1.1785.

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