Fundamental analysis of EUR/USD

A brief review of economic events:

Today is important for the further dynamics of the trading instrument. It should also be noted that market participants should be cautious and refrain from entering the market during the publication of US macroeconomic data, as there is a high probability of volatility surge. Yesterday's data on the U.S. consumer price index reflected the slowdown in inflation in the U.S., which raises the possibility that the Fed's key rate will remain at 5.25. Also important role will be played by the Open Market Committee's dot-com voting and the regulator's press conference.

Meanwhile, the Eurozone industrial production data was released today. After a noticeable decline the index showed a moderate growth of 1% for the second month in a row which is supporting EUR but further dynamics is highly dependent on the outcome of the Fed meeting.

Macroeconomic data influence:

Today is a day filled with important macroeconomic releases in the U.S., so we should expect strong spikes in volatility, which will be accompanied by a significant widening of the spread in the forex market.

The first block of US inflation news will be released at 15:30 (GMT+3).
The Fed's monetary policy meeting will start at 21:00 (GMT+3).

Technical analysis and scenarios:

Key levels:

Support levels: 1.06290, 1.06710, 1.07290, 1.07730
Resistance levels: 1.08210, 1.08790, 1.09295, 1.09920

According to Bollinger Bands the currency pair EUR/USD is in the upper part of the indicator, which may indicate a possible strengthening of EUR against USD. However, it should be noted that the bands are widening, which indicates a possible increase in volatility.

The MACD histogram is positive, which might indicate an uptrend. The MACD value is above the signal line, which is also a bullish signal.

Stochastic Oscillator has a value of 56.2969, which is above the signal line and indicates a possible strengthening of the euro.

Main scenario: based on this data the main scenario may be a buy position. In this case the take profit target may be 1.08800, stop loss should be set at the level of 1.07260.

Alternative scenario: short positions should be opened below the level of 1.07680 with the target of 1.06700 and stop loss at the level of 1.08200.