The completely empty macroeconomic calendar led to a completion of the euro’s correction yesterday. The currency was able to return to its previous values recorded before the sharp decline that occurred on July 6. Notably, there were no serious fundamental reasons for the drastic movement at that time, so the market had to adjust itself and smooth the existing imbalance. It took several days. The recovery of the single currency lasted for two trading days.
Today, US inflation data will be published and this week is going to be rich in events. As no one wants to take risks ahead of time, the market is likely to remain flat which may be at period of calmness before the active trading that may happen later this week.
The EUR/USD pair ended the last trading week in the correction phase near the support level of 1.1800.
The market dynamic continues to show signs of acceleration when the coefficient of speculative trades is at a high level.
Judging by the current location of the quote, the correction is slowing down. The 1.1880/1.1895 levels are likely to be the resistance area for the pair.
What is more, the resistance area is a reflection of the price slowdown in the period of July 1, 5, and 6 when there was a decline in the volume of long positions.
As the past may repeat itself, a subsequent drop in the volume of long positions looks quite likely. If so, it will lead to stagnation and possible retreatment of the price below the 1.1847 level.
As for complex indicator analysis, we can see that the 1-minute and 1-hour charts signal long trades on the pair amid the correctional phase. The daily chart still shows a downward movement, namely short trades.
InstaForex Group