Forex News: The euro-dollar moved without clear direction all day yesterday and gravitated around 1.0870 level. The fundamental scene was rather calm, contributing to the pair’s lack of determination.
The pair is in a ranging state but it is trading below the 50 period Exponential Moving Average and below 1.0870. This makes us favour the short side for a drop into 1.0800 support but a bounce above 1.0870 would invalidate such a scenario, making 1.0945 the first target. The overall picture is not much changed compared to yesterday but the oscillators are moving downwards and this increases the chances of an extended fall.
We have another slow day ahead, with the only notable release being the Eurozone Industrial Production. The indicator is scheduled at 10:00 am GMT and shows changes in the value of output generated by the industrial sector. Higher numbers than the anticipated -0.2% (previous 0.6%) are usually beneficial to the Euro; however, the indicator is known to have a mild impact on the market.
The Pound extended losses on the back of a disappointing performance of the Manufacturing sector and reached levels that were last seen in 2010.
The first support is located at 1.4350, followed by the more important one at 1.4230 but both these levels were last visited in 2010 so their importance may have degraded during time. The Relative Strength Index is deep in oversold and the Stochastic is lagging behind price, that’s why it is not below its 20 level, so we can safely say that the pair is oversold and a retracement higher is long overdue. The first potential level of resistance is 1.4495 but the Pound is weak and further downside cannot be overruled.
The United Kingdom didn’t schedule any economic data for today so the pair’s direction will be dictated by the technical aspect.