Yesterday\'s trading day was full of strong fundamental data and unexpected European currency strengthening against the US dollar. The trading opened at 200-day moving average, which was witnessed around 1.4257 at that moment. Permament lowering to the session lows and then the Euro\'s rally with refreshing of local highs were mostly caused by weak Eurozone fundamental statistics. By the American deals opening the pair had widened the sideward channel to the range 1.4228-1.4284. The trading day closed with a moderate downward movement and thereafter, a sharp Euro increase versus the greenback. During a few hours the pair managed to come over several resistance levels and renew the week high at 1.4408. Totally, the single currency gained by 88 points against the US dollar. The volatility rate stood at rather high level and amounted to 186 points.
The GfK German consumer sentiment index rose by 0.3 points against the last period, but did not come in line with the experts forecasts looking for a growth to 3.80. Eurozone M3 money supply, measuring the value of the national currency and cash assets, also declined to 3.0% against the same period reading of last year 3.6%. Finally, the private sector lending fell by +0,6% in July versus +1,5%, consensus growth forecast 1.3%.
A slight Euro strengthening was also due to the Eurozone stock indexes, which showed an improvement on Thursday, following the bank shares quotes.
Yesterday was widely expected the US data release. A great many of people was waiting for a decrease to -1.30%, but the US GDP remained unchanged at -1.0%. The American government did not change its economic sentiment index for Q2, noting that inventory reserves liquidation turned out to be more significant than it was expected. Besides, in the first quater of this year the US GDP showed a drop to -6.4%. Amid this positive mood the American currency rallied slightly against the Euro, but it did not last long.
The initial number of the jobless claims in the USA by the end of the week August 16-22 ticked down by 10 000 to 570 000, signaling that the labour market is still under control, and its steady recovery points to a steady way out of the crisis. Despite the issued figures did not match the expectations of decline to 560 000, but it did not affect the European currency downturn significantly.
The technical pattern remains rather clear. Having broken through several resistance levels, the pair was restrained by the psyhological level around the 44 big figure. The pair layed aboard to the resistance zone, which was formed by the upper line of rising price channel where our pair has been trading for a long time. The 2-day testing did not bring to any result, as a consequence — a sharp pair\'s pullback and new local maximum fixation.
Today, we will possibly witness the long positions fix-up by the end of the trading day, but another price outbreak to the early August highs around 1.4449 can also take place.
The resistance levels: 1.4379, 1.4408, 1.4447
The support levels: 1.4342, 1.4310, 1.4283
Today, I recommend to buy the pair at 1-hour timeframe closing above 1.4381 with the target – T/P 1.4440 and S/L 1.4351
Sell the pair at 1-hour timeframe closing below 1.4342 with the target – T/P 1.4286 and S/L 1.4383.
Best regards,
Analyst: M.A.Magdalinin
