On Wednesday, on the back of the varied fundamental data, the European currency could nevertheless recover a part of lost a day earlier positions, renewed the local maximum level near 1.4291. During the Asian and the European trading session the pair was trading in a narrow range with borders of 1.4199-1.4229. Modest attempts of growth were observed by the middle of the European session to the level of 1.4243, after that another decline to session\'s highs to 1.4189 followed. A sharp pair\'s increase at the end of the trading day was related with the release of FOMC meeting minutes on operations at the open market. The first resistance level at 1.4243 was breached allowing the pair to reach the second level of 1.4285, where in its turn the 38.2% correctional Fibo level and the upper bound of ascending price channel from August, 17 were also located. Totally, the single currency strengthened against the US dollar by 35 points, won back the two thirds of Tuesday\'s fall.
The Eurozone fundamental statistics could pleased us little. The GDP remained to be at the same level of -0.10%, compared to the previous month. The forecast was in line with experts predictions and did not generate a lot of buzz at the market. The PPI dropped to -0.80% against the advance to the level of 0.40% during the last period. The economists were looking for the decrease only to -0.50%.
The macroeconomic US data also turned out to be below the mark. Although the ADP Employment Change fell to -298K, compared to the similar period at -360K, but this indicator could not somehow highly influence to serious decision-making by market participants. The experts were waiting for a larger decline to -250K. It is pleasant to say that the growth of the Non-Farm Productivity index to 6.60%, against the last period, was higher than experts\' forecasts, who expected the increase only to 6.10%. I remind you that since May, 2009 this indicator has been showing a steady dynamic increase. The Factory orders, as Crude Oil Stocks decreased to 1.30% and -0.40M respectively.
On Wednesday, the Secretary of the Treasury Timothy Geithner announced at the briefing in Washington that the efforts of the USA and other countries at struggle with the world economic crisis allowed to pull the global economy «out of the abyss», but it is too early to twist the anti-recessionary programs of economical incentives.
Yesterday\'s testing of the low line of up — going price channel from August, 17, then the bounce from it to the upper line were fully justified by market participants expectations. On the pair\'s growth way, besides the mentioned above factors, 200 day exponential moving average appears, which is now located at 1.4277, where the 38.2% correctional Fibo level is existing. The general trend remains to be an up — going one and at breaking through the 43rd figure the pair once again will be able to return to the ascending channel with levels of 1.4300-1.4350. Bollinger bands again broke out, currently trying to make progress in a choppy short — term trend. Not the pair is trading in its upper boundaries.
It is worth mentioning such key events: today the European Central Bank interest rate decision will be announced. The experts are looking for its maintaining at the level of 1.00%. But how the market reacts to this, we will see at 15:45 (Moscow time).
Today I recommend to buy the pair at 1-hour timeframe closing above the level of 1.4296 with the target — T/P 1.4340 and S/L 1.4259.
Sell the pair at 1-hour timeframe closing below the level of 1.4241 with the target — T/P 1.4190 and S/L 1.4285.
Kind regards,
Analyst: Magdalinin M.
