The EUR / USD pair is currently trading in a fairly narrow range. Investors almost ignored the publication of weak industrial production data in Germany for June. According to the report, production fell by 1.5%, while the forecast was -0.5%.
The restrained reaction of traders is primarily associated with a sharply increased uncertainty in the market after the unexpected decisions of some central banks. Today, the Reserve Bank of New Zealand shocked many by lowering the interest rate immediately by 0.50% (forecast -0.25%). The Reserve Bank of India also made an unexpected decision, cutting the rate by 0.35 (forecast -0.25%). Amid this uncertainty, many investors seem to have decided to refrain from active bidding to clarify the general market situation.
Representatives of the Fed spoke about the increased uncertainty in forecasting the economy yesterday. Heads of the Federal Reserve Bank of St. Louis and San Francisco noted that amid increased uncertainty in world trade, the Fed could continue a cycle of easing monetary policy to maintain current economic growth rates. The final decision on this issue will be made later, when more recent economic statistics appear, taking into account the latest changes in the external and internal market conditions.
Today there is no important news in the EU and US economic calendar, therefore the situation on the debt market and geopolitical news will have a major impact on the currency pair.
On the chart, the currency pair still retains good potential for further development of the upward movement, in the direction of levels 1.1280 and 1.1300, but this scenario remains relevant as long as the bulls manage to keep prices above the level of 1.1275. In case of breakdown of this mark from top to bottom, the next target for price movement will be the level of 1.1100.
Resistance levels: 1.1280, 1.1300, 1.1355.
· Support levels: 1.1175, 1.1100, 1.1035.
The main scenario is a retest of level 1.1175 and the resumption of upward movement.
An alternative scenario is consolidation below 1.1175 and a decline to 1.1100.
The fundamental background on the market can now be described as neutral. The chart has more signals in the direction of further development of the upward movement. Therefore, within the day we give preference to longs from the level of 1.1175.