Yesterday the European currency proved that it happens to be. It started from the correctional movement which was formed at the opening of the Asian trading session. The correction reached the level of 1.4060, after which another demand for the Euro appeared. Only after that the resistance level of 1.4088 was broken through, with the further motion to 1.4134 and maximum level near 1.4165. A small correctional movement was clear during the second part of the trading session which reduced the pair to the fundamental zone of the 41st figure. In conclusion, regular increase and the closure at the level of 1.4150. Totally, the European currency grew against the U. S. dollar for 42 points. The volatility rate amounted 109 pips.
The main upward movement was connected to a quarterly report of JPMorgan Chase Bank, which gained the profit of $0.28 per share, while analysts predicted only $0.05 per share on average. Totally, net profit of the Bank grew by 36% in the second quarter of the year, compared to the same period last year and amounted $2,72 bln.
Even though French CPI declined by 0.10% yesterday, from the previous period, the trend is still positive. Italian trade balance also showed upgrowth. Compared to the previous negative reading it increased to 1.19B.
The initial jobless claims were rather serious data, their number decreased to 522K, compared to the past reading of 525K. Investors took these statistics data as another impact of moving to risky assets, which allowed the European currency to update the sessional maxima.
In summary about the fundamental data I want to point the statement of People\'s Bank of China. According to announced information the international country\'s reserves pierced the level of $2 trillion for the first time over its history. It suggests that purchase of TICS is still exist and China is ready to support American economy and its currency. I think, China does not intend to reduce its national reserve which, in general, is denominated in American currency. 65% of the actual reserve are put up in gilt — edged stocks.
The technical picture remains positive for the Euro. Testing yesterday the strength of the upper line of ascending price channel from July, 08, the pair ticked up and continued its up - going trend. Currently we can mark one more price channel, forming it from July, 19 and confirm it by yesterday\'s sessional maximum. I remind that the next serious obstacle for the European currency is the resistance level of 1.4174, breaking through of which opens the way to 1.4245. More likely that today we will not see this breaking through, but the testing of the first level mentioned above is quite actual.
The main resistance levels are near : 1.4137, 1.4174, 1.4190.
The support levels can be mentioned at: 1.4095, 1.4060, 1.4015.
Today the prelim data on Eurozone trade balance will be published. Building permits in the USA will be announced today which remains at the level of 0.52M, according to the experts\' forecasts, then the data on housing starts is to be issued.
Best regards,
Analyst: M. A. Magdalinin.
