September, 1 passed away not only with emotional outburst of students and pupils, but also of speculators and investors at Forex market. The refreshment of the last day local maximum was at 1.4380, after that followed a sharp decline to the lows of August, 20 to 1.4180, that made a lot of market participants revise their EUR/USD forecasts. The deals opened at normal rate with a hope for the upside trend. Positive Eurozone and US data were widely expected, but everybody saw the result. At the European trading session the pair\'s growth was restrained by the first resistance level at 1.4362, thereafter, the European currency began losing ground that had led to the lowering to 42 big figure zone. On the whole, the US dollar rallied by 106 points against the Euro. The volatility rate showed significant movements.
The pair\'s inability to continue its growth was caused by dissappointing Germany retail sales data, which came in line with the experts forecasts and rose to 0.7% versus the decrease of -1.3% in the same period. Later, was released the Germany jobless rate index, which ticked down by 1000 people, but it did not manage to step out the negative zone. PMI producer price index also demonstrated an increase to 48.20. The economists were looking for this index to remain unchanged as it was in the last period at 47.90. The Germany unemployment rate did not see any adjustments remaining at 8.30%.
All in all, the Eurozone fundamental data issued yesterday showed some kind of a pause in the further economic improvement, and weakened the major investors confidence «in the future».
Curiously enough, but the market begins to respond adequately the US positive microeconomic data. The European currency drop in the second part of the trading day was promted exactly by this factor. The Purchasing Manager Index of National Assosiation fixed strongly above 50 and had already showed a move to 52.90 versus the experts forecasts waiting for an upturn just to 50.50. The number of real estate contracts in the USA showed a slight reduction to 3.20% versus the same period reading of 3.60%, but this cut was not so significant, as it was expected. The construction expenditure and ABC consumer confidence index stood at the same rate at -0.2 and -45.00, relatively.
The technical picture is still very interesting. On one hand, a break through of yesterday\'s support levels can lead to further weakening of the single currency, on the other hand, there are no reasons for panics now. After a break through of the rising price channel bottom line of May,18, the pair went downwards sharply and managed to break through the secondary support level around 1.4261 formed on August, 12. The pair\'s decrease was restrained by another correctional level, which takes its rise from August, 17. The 200-day exponential moving average did not succeed to stand the bears\' pressure, at present, it is at 1.4283. The pullback from correctional Fibo level of 63.8% was rather strong and, as we can see at present moment, the European currency managed to bounce back the most part of positions and stick in a small flat range within 1.4170-1.4243.
Today, I recommend to buy the pair at 1-hour timeframe closing above 1.4236 with the target – T/P 1.4273 and S/L 1.4195
Sell the pair at 1-hour timeframe closing below 1.4162 with the target – T/P 1.4127 and S/L 1.4220.
Best regards,
Analyst: M.A. Magdalinin
