EUR/USD: weak statistics affect the pair negatively 01 March 2021, 12:25

EUR/USD: weak statistics affect the pair negatively

01 March 2021, 12:25

Scenario
Timeframe	Weekly
Recommendation	SELL STOP
Entry Point	1.2032
Take Profit	1.1920
Stop Loss	1.2100
Key Levels	1.1920, 1.2032, 1.2110, 1.2230

Alternative scenario
Recommendation	BUY STOP
Entry Point	1.2110
Take Profit	1.2230
Stop Loss	1.2050
Key Levels	1.1920, 1.2032, 1.2110, 1.2230

Current trend

The EUR/USD pair is correcting downwards, trading at 1.2082.

EUR is down against USD amid disappointing macroeconomic statistics from the leading eurozone countries. French Consumer Spending in January fell by 4.6% after rising by 22.4% in December. France's GDP in Q4 2020 accelerated its decline to –1.4%. In turn, the Consumer Price Index in Spain fell by 0.6%, while the Harmonized Index of Consumer Prices in February fell by 0.1% against the forecast of growth by 0.4%.

USD received support from two factors at once. First, the US Food and Drug Administration approved the vaccine from Janssen, a subsidiary of Johnson&Johnson. The new drug has become the third officially approved one in the USA. Another factor of strengthening USD was macroeconomic statistics. The Michigan Consumer Expectations Index in February amounted to 70.7 points against the forecast of 69.8 points. Consumer Sentiment Index was 76.8 points, which also exceeded the projected 76.5 points.

Support and resistance

On the local chart of the asset, the price continues to trade within the ascending channel, having reached the support line. Technical indicators continue holding a definite sell signal. Fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram moved to the sell zone.

Resistance levels: 1.2110, 1.2230.

Support levels: 1.2032, 1.1920.

Trading tips

If the asset continues declining and the price consolidates below the local support at 1.2032, short positions can be opened with the target at 1.1920. Stop-loss – 1.2100. Implementation time: 5 days.

If the asset reverses and continues growing and the price consolidates above the local resistance at 1.2110, long positions will be relevant with target at 1.2230. Stop-loss – 1.2050.