On Wednesday the pair corrected to the level of 109.65. USD lost positions in view of weak July statitics from the US construction market and negative data of the minutes of the recent FOMC meeting. The members of the Committee expressed their concerns in the rate of growth. may remain under its target evel of 2.0% for a long time, therefore the Fed may postpone making a decision on increasing its interest rate. On the other hand, yen was supported by strong data on the Japanese trade balance wich made up 418.8 bln yen. This also pushed the pair downwards.
During the day the market is waiting for the release of July data on the of industrial output in the USA. The indicator is expected to reduce from 0.4% to 0.3%. The implementation of the forecast may put additional pressure on USD and reverse the pair that has started to grow by now.
Technically the pair has approached the area of 110.10-110.25 which coincides with Fibo correction 23.6%, the middle line of , and Murrey level . If the price consolidates above it, one may expect further growth to the levels of 110.90 (Fibo correction 38.2%, Murrey level ) and 111.60 (Fibo correction 50.0%). Otherwise the price may resume its fall to 109.30 (lower line of , Murrey level ) and 108.90 (August minimums).
Support levels: 109.80, 109.30, 108.90.
Resistance levels: 110.25, 110.90, 111.60.
In the current situation long positions may be opened after the breakout of the level of 110.25 with target at 110.90, 111.60 and stop-loss at 109.90.
Short positions may be opened below the level of 109.80 with targets at 109.30, 108.90 and stop-loss at 110.20.