Yesterday\'s trading day on the EUR/USD currency pair went with a succeeding range. The first part of the deals was under the bears\' pressure. Opening near the area of the 43rd figure, the pair could fix the minimum level of the trading day at the level of 1.4259, after that the decline to the first support level was perceived as the call to purchase, then the recovery to the opening level and a sharp speculative growth with the replacement of new local highs at 1.4370 and testing of several resistance levels. At the closing of Monday\'s trades the bears\' managed to get back the bulk of lost positions, but the day\'s closure remained in favor of the Euro. Totally, the European currency grew by 26 points against the US dollar.
According to the lack of important macroeconomic data publications, a lot of traders reckoned on a safe, calm market. The Eurozone CPI in August dropped by -0,2%, compared to the same period of the last year. This indicator even stayed in a negative zone, but the decrease was less than economists expected, forecasting a decline of -0.50%. But Italian Consumer Price Index, vice versa, came out of the negative area and showed the growth by 0,4% against the previous month, which turned out to be at 0,0%.
These data created a little flap among the traders to the middle of the session, befettered the pair in the trading range of 1.4264-1.4300 for some time.
The Chicago PMI showed the increase to the level of 50.0 and was much higher than experts forecasted, they were looking for the growth to 47.50. Remind you that this indicator has been showing the increase for four consecutive month since the beginning of the year and could recover from 34.1.
The technical picture. Yesterday the pair once again tested the low line of ascending price channel from May 18, 2009 but to the closing of the trading day the EUR/USD currency pair returned to the trading range which was familiar to us. The 38,2% correctional Fibo level (minimum level from 29.07.09) prevented the pair from the decline, pushing off which the single currency soared upwards sharply. 200 day exponential moving average also was a resistance level in this zone, which currently is seen at 1.4289. A sharp growth of the currency pair was also a sudden surprise for Bollinger bands which now broke out and showed us the continuation of the uptrend. At this moment, the pair is trading at the upper border of it. The growth can be kept at a distance by the level of 1.4381 (upper band), the decline can be restrained by 1.4331 (medium level). The MACD indicator also came out of the selling area, showing us the first premises for pair\'s purchase.
Today the economic calendar consists of a definite important fundamental data, which you should draw your attention on. The Eurozone will be marked by German Unemployment Change Rate and Purcahsing Manager Index. The publications of the US Wholesale Purchasing manager index, Pending home sales and Construction spending data will be announced today.
Today I recommend to buy the pair at 1-hour timeframe closing above the level of 1.4364 with the target — T/P 1.4404 and S/L 1.4338.
Sell the pair at 1-hour timeframe closing below the level of 1.4321 with the target — T/P 1.4285 and S/L 1.4352.
Best regards,
Analyst: Magdalinin M.
