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The Fed's Protocol Hit the US Dollar. Trading Idea for EUR/USD

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The US dollar strongly fell in price relative to the majors. The fall of the dollar index (#DX) exceeded 0.75%. According to the FOMC protocols, most officials expect a stable economic growth. An increase of the Fed's key interest rate may have consequences in the near future. At the same time, some representatives of the Central Bank are concerned about a low level of inflation. The regulator plans to evaluate new economic data before determining the further rate of the monetary policy tightening. A negative dynamics of the US government bonds yield and a weak report on orders for durable goods put pressure on the US dollar. The volume of orders for durable goods fell by 1.2% in October. Experts expected the growth of the index by 0.3%. I think that the US dollar will remain under pressure.

Lets look at the current technicalpattern on the EUR/USD currency pair

Support levels: 1.17250, 1.16000, 1.15000

Resistance levels: 1,18750, 1.19500, 1.20500


A quite optimistic statistics on business activity in Germany and the Eurozone has been published today. It provides additional support to the euro.

The bullish sentiment prevails on the EUR/USD currency pair since the beginning of the current month. I dont exclude a possibility of the further growth of its quotes. The classic TA figure "Head & Shoulders Inverse" was formed on the D1 timeframe. The MACD histogram is a confirming signal. The indicator has moved to the positive zone and continues rising.

It is better to buy EUR/USD in case it fixes above the 1.18750 mirror resistance. The closest target for taking profit is the 1.19500 mark. The EUR/USD pair may reach the 1.20500 key resistance level in the medium term. Use a trailing stop for this deal. Look for the confirmations and entry points into the market on smaller timeframes.

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About the author

Igor Afa is a financial analyst at JustForex.


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