Forex Market: EUR/USD plunges to fresh 11-month lows

The euro continued to slide against the US dollar on Wednesday and reached lows unseen since September 2013. EUR/USD fell to a daily low at 1.3285 at 7:44 GMT, which has been the pairs lowest level since September 13th 2013. The pair managed to breach the first key daily support, as well as the first and the second key weekly support levels.

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.3331. In case EUR/USD manages to breach the first resistance level at 1.3349, it will probably continue up to test 1.3378. In case the second key resistance is broken, the pair will probably attempt to advance to 1.3396.

If EUR/USD manages to breach the first key support at 1.3302, it will probably continue to plunge and test 1.3284. With this second key support broken, the movement to the downside will probably continue to 1.3255.

The mid-Pivot levels for today are as follows: M1 – 1.3270, M2 – 1.3293, M3 – 1.3317, M4 – 1.3340, M5 – 1.3364, M6 – 1.3387.

In weekly terms, the central pivot point is at 1.3386. The three key resistance levels are as follows: R1 – 1.3430, R2 – 1.3459, R3 – 1.3503. The three key support levels are: S1 – 1.3357, S2 – 1.3313, S3 – 1.3284.

Euro zone

At 9:00 GMT Eurostat is to report on construction activity in the Euro zone. Seasonally adjusted construction output in the region rose 1.5% in May compared to a month ago. In annual terms, output expanded 3.5% in May. This indicator reflects how resilient construction sector development is and also provides clues over investment activity. Higher rates of increase in output usually support the common currency.

Meanwhile, producer prices in Germany fell more than anticipated in July. The PPI slipped 0.1% on a monthly and 0.8% on annual basis. The median forecast by experts pointed to a flat performance in July compared to June and a 0.7% drop in July compared to the same month a year ago. The main factor behind the registered slump in producer prices was the continuing drop in prices of energy products. This heightens the risk over inflation outlook in the country.

United States

At 18:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on July 29th-30th. The minutes offer detailed insights on FOMC’s monetary policy stance. This release is closely examined by traders, as it may provide clues over interest rate decisions in the future. High volatility is usually present after the publication.

The dollar received support on Tuesday, as the number of housing starts in the United States jumped 15.7% to the annualized 1.093 million units in July, reaching levels unseen in eight months. In June the number of housing starts has been revised up to the annualized 0.945 million units from 0.893 million previously. The number of building permits, an indicator reflecting housing market activity in the future, rose 8.1% to reach the annualized 1.052 million units in July. Permits were reported at an annualized level of 0.973 million units in June, a revision up from 0.963 million, as reported previously.