Yesterday, the European currency couldn\'t remain on the previous highs and decreased to the Monday low. In the Asian session and in the first part of European one, the EUR/USD currency pair showed growth. Mostly, it was due to the positive mood of the players, obtained on Monday. The rally was stopped at 1.4151, turning out to be the trading day maximum. The American deals rolled on under the bears\' umbrella. The announcements of the FRS representatives and the U.S. fundamental data scared the traders provoking them to cut the long positions. Almost by the end of the trading the pair had ticked down to the 40 th big figure zone and set a minimum at 1.4001. Totally, the U.S. dollar gained 38 points versus Euro, the trading volatility rate amounted to 150 points.
Let us look through the Eurozone microeconomic findings, released the day before. The number of unemployed in Germany increased in June by 31.000 or by 8.3% , better than expected estimate of 45.000. The money supply M3, indicating the currency and assets value, fell yesterday by 3.70%, consensus 4.0%. The last reading was 4.90%. The Eurozone consumer price index dropped -0.10%, better than the economists\' expectations of -0.20% decline. As we can see, this index is in the acceptable diapazon, and there are no reasons for worrying. According to the indicator mentioned above, there are no deflation concerns in the single currency zone.
The U.S. microeconomic statistics showed the Chicago PMI rise to 39.90, which is surely better than the experts\' forecast of 38.60, and the consumer confidence in the USA weakened to 49.30, compared to the last period. The economists were looking for other datums at all, predicting this index upturn to 55.80. The last period mark was at 54.80. Why such a fast break off — the answer is simple. Many a one are sure that in a short term the government\'s activity of surmounting the crisis would be effective and would help to bring the state economy on the way of «firm» recovery.
Also, worth pointing out the IMF announcement about that the greenback\'s share in the international reserves in Q1 reached the record high since 2007 of 65% vs. 64.1% in the last quater of 2008. The European currency share contracted from 26.5% to 25.9%, the British pound — from 4.1% to 4% and yen — from 3.2% to 2.9%. In its turn, it imlpies once again that there is no intention and also opportunity to start the greenback reserves reduction and refuse from this currency as the world\'s one.
EUR/USD confidently stood around the bottom line of the rising price channel (24.04.09). On the downside there appears the old Fibo level 23.6% (1.3995). The current support level is the range of 40 th big figure. The general mood is still on the bulls\' side. In my view, to break through the level of 1.4140, one more «swing-up» is reqiured, which is now prepared by the single currency.
The resistance levels: 1.40530, 1.4070, 1.4102, 1.4151
The support levels: 1.4001, 1.3981, 1.3968, 1.3936.
Recommendations for today (short term trading):
Buy the pair at a 1-hour timeframe closing above 1.4057 with a target – T/P 1.4110 and S/L 1.4009.
Sell the pair at a 1-hour timeframe closing below 1.3975 with a target – T/P 1.3917 and S/L 1.4017.
Analyst: M.A. Magdalinin