Yesterday, the European currency reached its lows at 1.0585 and started correcting up. At present, the pair is trading at 1.0620. The level of 1.0585-1.0570, where large trading volumes were seen yesterday, is considered as the key one.
Moreover, it is worth noting that a number of major banks, such as Goldman Sachs, have significantly reduced EUR/USD short positions. As many analysts suggest, these actions are already priced into the market. If it is so, a large correction in the EUR/USD pair is possible.
Support and resistance
As for technical indicators, no reaction followed the publication of Germany's GDP statistics, which showed a growth by 0.3% in the third quarter. On an annual basis, GDP was up by 1.8%.
Support level: 1.0585.
Resistance level: 1.0650.
Short positions can be opened after the breakdown of the level of 1.0585 with the target at 1.0450 and stop-loss at 1.6000.
As an alternative scenario, long positions can be considered if the price rebounds from the level of 1.0585.