As expected, the Friday trading rolled on in a rather low-key motion. The European currency tried to recover after Thursday losses, but any growth efforts were considered by the investors as a purchase opportunity. At the weekend the closing was at 1.3980. The whole Asian trading session the dollar was under the pressure, the single currency reached the maximum at 1.4027, but thereafter, with the European session opening and till end of the American one, the EUR/USD currency pair continued its lowering. During 03.06.09 the Euro rose by 27 points against the greenback, the volatility rate amounted to 83 points.
The Eurozone fundamental data disappointed us on Friday. The Europe retail sales fell by -0.40%, consensus -0.10%. The last indicator showed growth of 0.10%.
Due to the Independence Day celebration on Friday the American market was closed, so there were no big trading volumes in the second part of the deals.
Let us look through the technical image of the market. As we can see, the U.S. dollar succeeded to break through the bottom line of the rising trading channel of 24.04.09, and currently, the pair is trading within it. Now this level is considered as a resistance, and in case of moving closer to 1.4021, there may be opened the short positions with slightly higher S/L rate. If the pair remains in this trading diapazon during several days or spikes down to the 39 big figure bottom, then it is possible to open the mid term short positions.
Pay attention to that today the pair touched the resistance level, at the fibo level 23.6% around 1.3995, and after that bounced back to the opening level. The downward trend is also shown by the 200-day exponential moving average, which is higher than the pair's rate.
The Bollinger bands demonstrate high volatility rate in the market, which can turn out to be a good outbreak opportunity, most llikely that it will be on the downside. The middle Bollinger band, which stood at 1.3976, appears to be a dynamic resistance, if the pair breaks through above this range it may be considered as the signs of sideward trend.
On the whole, the situation with the Euro remains uncertain, so according to the trading direction of this week it may be defined which side to take in the future.
Today there are no surprises in the economic calendar for us. Concerning the Eurozone, will be issued the Sentix investor confidence index, it is expected to be at -23.5, compared to the last period reading -27.0. In the American session is expected a release of nonindustrial index from the National Association Of Purchasing Managers (NAPM), according to the forecasts it is to come out at 45.90 vs. 44.00 in the previous period. Worth mentioning that index above 50 impacts the U.S. currency positively.
Recommendations for today (short term trading):
Buy the pair at a 1-hour timeframe closing above 1.4031 with a target – T/P 1.4073 and S/L 1.3975.
Sell the pair at a 1-hour timeframe closing below 1.3949 – T/P 1.3890 and S/L 1.3990.