So, as we could see at the market yesterday (29/06/09) the currency pair EUR/USD was in a calm position. The Asian trading session declined the pair to the level of 1.4002, after that the Euro recouped a small amount of lost positions. During the second part of the European trades and almost till the closure of the American deals the Euro again dominated over the U. S. dollar and showed the growth to the level of 1.4102 which appeared to be the trading day\'s maximum. Totally the European currency could rise against the dollar for 41 points, the volatility rate was rather big and amounted 120 pips.
As it was seen yesterday, the European currency again began to weaken against the U. S. dollar during early trades, on account of China official representatives statements that their country is not planning unexpected changes in foreign exchange reserves structure in the future, in other words, China does not want to turn away the dollar, despite the statements had been recently announced from the different sources.
The ECB also poured oil on flames which announced that the key rates will remain unchanged, at least during the several months, this again did not play in favor of the dollar. The ECB Council is waiting for new data which would help to define the further policy trend and we will see these data in the nearest few days.
Yesterday\'s statistics on consumer confidence in the Eurozone were rather attractive and appeared to be better, than experts forecasted. -25.0 — this is the result, the forecast was -30.0. Let me remind you that the higher consumer confidence the more it points to the high consumer demand, demonstrating the growth of the economy.
I also want to mention yesterday\'s IMF statement according to France, in which it was said that the recession and decline of tax revenues would lead to an «uncomfortably high budget deficit» and the further economic incentives would have to be modest and temporary. The IMF also called to a «firm fulfilment» of a steady strategy which would revitalize the country\'s public finances.
As for the U. S. fundamental data, it is worth saying that the business index of FRB Dallas in the manufacturing sector changed in June to -20.4, compared to predictions of -16.
According to Bloomberg statements, more five banks were closed in the USA for the previous week. Financial authorities decided to close Community Bank of West Georgia and Neighborhood Community Bank of Newnan в Georgia, Horizon Bank of Pine City in Minnesota, MetroPacific Bank of Irvine and Mirae Bank of Los Angeles in California. Their total assets amounted to $1,1 billion. This decision once again says that not every back areas in economy are protected, as it seems for the first sight.
According to the technical picture, I want to mention some moments. Tha pair came to a rather serious resistance level near 1.4137 (maximum of 24.06.09), breaking through of which will give a big incentive to the continuation of the pair\'s upward trend. It is entirely possible that the pair will fall from these levels.
Currently, the pair is trading near the upper border of the Bollinger band which is the dynamic resistance for us. The daily candle diagram says about the bulls\' market, as the decreasing of the European currency, which took place in the morning yesterday, was not a strong one against the whole market\'s mood.
Support levels are located near 1.4099, 1.4068, 1.4043.
Resistance levels: 1.4137, 1.4172, 1.4270.
Today\'s recommendations (short - term trading):
Buy the pair at a 1-hour timeframe closing above 1.4139 with a target – T/P 1.4170-1.4205 and S/L 1.4093.
Sell the pair at a 1-hour timeframe closing below 1.4079 with a target – T/P 1.4034 and S/L 1.4121.