Current dynamics

The EUR/USD pair is showing a sharp decline, adjusting after predominantly "bullish" trading at the end of last week: quotes are testing the 1.0531 mark in a downward breakout, while investors are awaiting the publication of November statistics on business activity in the United States and the Eurozone.

According to forecasts, the German and Eurozone manufacturing indices of S&P Global will remain unchanged at 43.2 points and 45.2 points, respectively, and in the United States at 48.8 points. In this case, the indicator of the Institute for Supply Management (ISM) is likely to rise from 46.5 points to 47.5 points. At 12:00 (GMT 2), the market will receive data for October on the unemployment rate in the Eurozone, which currently stands at 6.3%, and the head of the European Central Bank (ECB), Christine Lagarde, will speak about the regulator's plans for further monetary easing in the region.

Last Friday, the Eurozone presented inflation statistics for November: the year-on-year CPI accelerated from 2.0% to 2.3%, in line with market forecasts, and on a monthly basis it lost 0.3% after an increase of 0.3% in the previous month, while the core indicator was adjusted from 2.7% to 2.8% on an annual basis and fell 0.6% after an increase of 0.2% on a monthly basis. Experts expect that the ECB will not go for a more drastic easing of monetary policy, although some members of the regulator's Board do not rule out this possibility. In particular, the head of the Banque de France, François Villroy de Gallo, said that an adjustment in the cost of borrowing by -50 basis points in December should not be ruled out.

At the end of the week, the US will publish the November labour market report: the number of new jobs created outside the agricultural sector is expected to rise by 183,000 after an increase of 12,000 last month, as well as a slight decrease in the average hourly wage from 0.4% to 0.3% and the unemployment rate to remain at 4.1%.

Support and resistance levels

Bollinger Bands on the daily chart show a reversal in the horizontal plane: the price range is narrowing, reflecting the mixed nature of trading in the short term. MACD is growing, maintaining a weak buy signal (the histogram is located above the signal line). Stochastic, moving away from the highs, turned to a downward plane, indicating the risks of overbought currency in the ultra-short term.

Resistance levels: 1.0530, 1.0561, 1.0600, 1.0630.

Support levels: 1.0500, 1.0450, 1.0400, 1.0350.

Business scenarios

Short positions can be opened after a confident breakout of the level of 1.0500 downwards with the target of 1.0400. Stop-loss — 1.0561. The implementation period is 1-2 days.

A bounce off the 1.0500 level as support followed by an upside break of 1.0561 could be a signal to open fresh long positions with the target of 1.0665. Stop-loss — 1.0500.