Finally, Friday managed to recover the European currency in the market. Lowering to the lows of August 20 to the 42 big figure range in the first part of the trading day eased the Euro\'s confidence, but during few hours the US dollar lost the ground. Such dynamic movement was caused by the US positive fundamental data and the investors\' switch to more risky currencies. As an outcome of serious battle, the European currency succeeded to gain 44 points against the American currency.
As we can see, the Eurozone news release did not bring the Euro strong hopes for growth continuation. Thus, the French state budget moved further to the negative zone from -86.60 to -109.00. Thereafter, followed the Italy trade balance, which came in the negative zone at -0.63, despite positive experts forecasts against the same period reading at 1.16. The second ECB President speech also did not manage to make any corrections regarding the Euro weakening at that moment.
The adjustments in the US non-farm employment data turned out to be more significant, than it was expected. The lowering forecast of 56.000 was wrong versus the real drop of 60.000. Amid this figures, the single currency fell sharper, refreshing the session low at 1.4191. The general positive mood was not worsened by the jobless rate, which tiсked up by 0.3% against the last period, fixing at 9.70%, consensus 9.50%. The average wage in the USA appeared to be higher by 0.10% on month.
The technical image. As we could see on Friday, a confident testing of the rising price channel bottom line came to no good, giving the bulls one more opportunity for currency strengthening. The downturn was also restrained by the support level at 1.4244 and by correctional Fibo level of 50.0%, which stood at 1.4226. Let us put aside the 200-day exponential moving average for a while, as recently, the pair has been trading at this rate, not paying attention to its bounds. Currently, the pair is testing the upper bound of advancing price channel of August 17, a break through of this range would allow the pair to increase to 1.4379. MACD indicator is around the purchase range, but today it is better not to wait for a sharp European currency rally.
Today, I recommend to buy the pair at 1-hour timeframe closing above 1.4341 with the target – T/P 1.4375 and S/L 1.4312
Sell the pair at 1-hour timeframe closing below 1.4286 with the target – T/P 1.4220 and S/L 1.4315.
Kind regards,
Analyst: M.A.Magdalinin
