EUR / USD opens Thursday session with a corrective decline, after updating the weekly highs the day before.
A whole series of inconclusive statistics from the United States weakened the dollar position strong enough this week due to which EUR / USD made four-day gains.Yesterday, the dollar was hit by durable goods orders data which decreased by 0.1% within month with the projected growth of 0.1%. Producer price index moved downwards reaching 0.1% while the expected growth was 0,2%
To our opinion today the market situation may change significantly. First, no important economic data publishing is expected in the United States today which reduces the risk of a new bearish wave on the dollar index. Secondly, yesterday EUR / USD updated weekly highs which may locally provoke fixation of long positions by this contract since the global trend remains bearish. Thirdly, the Brexit case may cause the pressure on European currency. The day before, the parliament did not support the "hard" exit from the EU on March 29 but this voting does not exclude possible Brexit without an agreement at any other time. The scenario with the “hard” version of Brexit is still possible said Theresa May yesterday. Today, a new voting on the Brexit deferment will be held in the parliament but for the final adoption of this decision all 27 EU member states must approve it. This issue will probably be addressed at a summit in Brussels which starts next week. The decision to postpone Brexit will extend the tenure of the British and European economy under strong pressure of uncertainty and risks associated with Brexit.
On the chart, yesterday situation developed in an alternative scenario, the pair came over resistance and continued its growth in direction of a strong medium-term resistance area formed in the range of 1.1330-1.1350. This area was tested yesterday. The price rebounded down, reinforcing expectations of a reversal formation inside this range. No confirming signal in the form of a breakdown of local support at 1.1300 is given but as long as the price stays below 1.1350 the bearish wave resumption scenario seems to prevail.
· Resistance levels: 1.1330, 1.1350, 1.1400.
· Support levels: 1.1300, 1.1245, 1.1200.
The main scenario is decline to 1.1245.
An alternative scenario - consolidation above 1.1350 and growth to 1.1400.
High local uncertainty remains in the market which is intensified by the forthcoming expiration of futures contracts dependant on European currency which is always accompanied by quite strong and not all the time clear moves. Therefore, it is recommended to avoid this contract trading. As an alternative, you can consider selling at range of 1.1330.