The U. S. dollar won back almost all lost during the deals of 01.07.09 positions yesterday. At the Asian session opening the currency pair EUR/USD began to decline at once, at the beginning it fell to the first support level of 1.4101, after breaking through this level, the pair dropped to 1.4050, then it reduced to the 40th figure ground. Totally the U. S. dollar rose against the Euro for more than 199 points. The volatility rate also was at a very high level.
The decline of the European currency was due to many factors. The nervosity among the bulls started to mature from the very morning, when the first fundamental data on the Eurozone appeared. The PPI reduced by -0,2% contrary to the experts\' forecasts, who had predicted the growth to 0.1%. On the annual basis the index declined to -5.8%. The unemployment rate grew by 9.50% and was higher than experts\' forecasts, who were waiting for the growth only for 9.30%. These statistics led to the reduction of rather large amount of long positions on the Euro.
The deputy foreign minister of China He Yafey could not help the European currency, who reckoned on the reserve currencies diversification in the global financial system. He said that «the U. S. dollar is the main reserve currency at this moment and we are hoping that its exchange rate will remain steady». The Chinese part also is intended to announce the statement of new world reserve currency introducing during the summit G8, which will be held next week. If the following question is really been touched during this summit, then the U. S. dollar will turn out to be under the strong pressure.
The Eurozone interest rate was remained at the level of 1.0%, which also was been predicted by experts. As we could see, this decisiondid not give confidence to the major investors and was not coincide with their long — term forecasts, allowing the bears\' «to draw the blanket» over its side.
In addition to the Eurozone. The IMF announced the conditions of replacing its bonds. The decision about issueing the bonds by 5 years was made. Only three countries said that they are planning to buy IMF\'s bonds: China which is ready to buy bonds for $ 50billion, Russia and Brazil (both for $ 10billion).
Now some information about the USA. The non-farm employment status data, as it was predicted, according to the yesterday\'s prelim ADP statistics, were worse than forecasted. The final result was -467,000, compared to the previous figures of -322,000. Then jobless claims added negative to the overall picture, which declined to 614,000, but did not coincided with the forecast. I remind you that the previous period showed the decrease to 630,000, experts forecasts were at the level of 612,000. The only thing that somehow warm the soul was the U. S. unemployment rate which showed the growth only for 9.5% and did not came in line with specialists\' forcasts of 6.6% growth.
Speaking about the «housing question» it is worth saying that the President administration made a decision about expanding its program of refinancing mortgages. The only significant addition to it that mortgagors, whose lending value is up to 125%, can take part in this program. The previous figure was at 105%. So, may be, we will be able to see indicators\' growth related to the housing in near future, although it is less possible, taking into account the previous data on this market.
Thus, in conclusion to all mentioned above, it is clear that neither the Eurozone nor the USA could not demonstrate us those expectations of soon economy recover, so we are going to wait again and believe in miracle.
Speaking about the technical picture, everything is so simple as twice two is four. Two support levels of 1.4101 and 1.4050 were passed in one breath. The 40th figure was held, because of 23.6% Fibonachi level, which also was a support level and where the low border of the upward price channel from 24.04.09 came. So we have two ways now: either the next attempt of mentioned above levels testing or a steady surge to 1.42 and test it. But don\'t hurry up. Considering that the first weekend of the third quarter are forward, I think that everything will be without outrages.
I wish you good mood and to have a pleasant rest!
Analyst: M. A. Magdalinin.e-mail: email@example.com