During the yesterday\'s trading session the European currency could not demonstrate all its power and breached higher the maximum level of 1.4353, allowing the bears to take the initiative and correct the pair to Friday\'s minimum level of last week near 1.4210. The first part of the trading day was done in a positive mood, continuing the upward pair\'s trend. It was mainly due to the positive fundamental Eurozone data. So having failed to break through above the yesterday\'s high, the pair\'s growth was met by a number of the Euro sales against the U.S. dollar, which allowed the trading instrument to decrease to the area of the market opening, and then, breaking through the 200 day exponential moving average, to test the trading lows. The deals closed at 1.4257.
Totally, the US dollar grew by 41 points against the Euro, the volatility rate came to 143 points.
The data on business climate in Germany were promotive of the EUR/USD currency pair growth to the opening of the deals in Europe. This indicator once again in the past few months showed the increase to the level of 90.50, compared to the experts\' forecasts of 89.10. Then German import prices data were released, which dropped by -0.9%, but were in line with the forecast and did not create a flap among investors.
Only to the opening of the American trading session the single currency turned out to be under the pressure. The American stock market stopped in its tracks, fixing none of significant changes. Following this indicator, the publication of durable goods orders in the USA did a heavy punch, declined the pair to lows. The durable goods orders demonstrated the growth only by 0.8%, altough the experts were looking for the increase by 1.10%, compared to the rise by 2.50% within the previous period.
New home sales in the USA continue to increase. Amid the yesterday\'s statistics, the growth by 38K was not in line with experts\' predictions, who were looking for the decrease of this indicator to 393K.
The technical picture held its ground under the bears\' pressure. The major decline to the low border of the up-going price channel from May,18 was tested for strength, pushing the pair from Friday\'s low, which was fixed near 1.4211. Currently, the European currency is showing us a gradual recovery and if this channel is not to be breached during today\'s trading day, then it will be possible to think over the opening of medium - term and long positions in the near future. The 200 day exponential moving average, located on 1-hour timeframe, could not suppress the yesterday\'s EUR/USD currency pair decrease. However, the 38.2% correctional Fibo level, disposed at the area of 1.4210, came to help. The in — built tendency again is located in a side channel but now with a wider borders of 1.4208-1.4353.
Bollinger bands showed us a turning of the up — going trend with a moderate reduction in market liquidity. The levels, marked by the bands, can be taken into account for making decisions about buying or selling the EUR/USD in a short — term outlook.
Today I recommend to buy the pair at 1-hour timeframe closing above the level of 1.4265 with the target — T/P 1.4309 and S/L 1.4238.
Sell the pair at 1-hour timeframe closing below the level of 1.4219 with the target — T/P 1.4168 and S/L 1.4247.
Best regards,
Analyst: M. Magdalinin.
