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flag ★ The analysis of the EUR/USD currency pair for 07.07.09 with the outlook for (08.07.09).

Forex Analysis:::2009-07-07T21:00:00

The analysis of the EUR/USD currency pair for 07.07.09 with the outlook for (08.07.09).

The yesterday\'s behaviour of the EUR/USD pair was rather fanciful. With the Asian deals start-up the currency pair began lowering steadily till the European session opening. Having fixed a new local minimum at 1.3903, in the support level range, the U.S. dollar weakened versus Euro again, the last one rallied above the opening level and set up a trading day maximum at 1.4049. By the end of the trades the American currency strengthened against Euro, the pair closed at 1.3920. Altogether, the U.S.dollar gained 54 points against the single currency, the volatility rate stood at 146 points.

The morning EUR/USD fall was connected with the last trading day decline. In the horizont appeared the downward oil and gold quotations, that made the major players worry. Although, the France trade balance showed better estimate of -2.70 than it was expected, it sood in the negative zone, that seems to be not in favour of Euro.

The European currency got a support from the German manufacturing orders data, which showed unexpected growth by 4.40%, compared to the last period reading of 0.10%. The experts were looking for increase of 0.60%.

The ECB representative Ordonez also supported the 16-nations currency and the Eurozone as itself. According to him, he doesn\'t see the significant deflation risks and supposes that the bonds purchasing package will have a success, noting the improvement of market participants mood. In his opinion, the stimulating politics should be continued.

The main week theme. Today will start its work the G-8 Summit, the main goal of which is to develop an efficient global management in the world. The session will last till this Friday. In reference to these decisions that will be made in near time, we can build up our trading strategy. Presently, the market is very small, so be beware of false outbreaks, as most likely that the deals will consist of speculative movements, and the short term trend will have a dominating position.

The technical market pattern still moves sidewards. The key support level is at 1.3885, the resistance - 1.4027. Trading in this range can stay till the end of this week. Pay attention to the Bollinger bands, which demonstrate a rather high liquidity rate in the market, a break through is possible and as i think, to the bears side.

If the pair breaks through below 1.3885, then the next step will be directed to the range of 1.3785 — 38.2% Fibo level. Around 1.3665 takes course the 200-day exponential moving average, clearly shown at the day chat.

Today will be released the essential Eurozone GDP data, its decrease is to stay at -2.50%. An hour later will be issued the German industrial production report. The experts\' forecasts see a tick up by 0.60%.

From the U.S. fundamental data we will witness the findings of MBA refinance index and crude oil reserves.

To sum up, it should be added that today, Russia and China will offer the «G-8» Summit, which will take place in Italia, to launch new reserve currencies, however, it won\'t go further. This matter discussion won\'t be led by the leading members of the world economies assisiation, as it is not in the schedule.

Recommendations for today:


Buy the pair at a 1-hour timeframe closing above 1.3932 with a target – T/P 1.3990 and S/L 1.3873.

Sell the pair at a 1-hour timeframe closing below 1.3870 with a target – T/P 1.3826 and S/L 1.3935.

Have a good trade and nice mood.

Analyst: M.A.Magdalinin

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