The Friday trading, as it was expected, took its rise from the the local high refreshment at 1.4637, and by the end of the trading day was witnessed a small profit fixation of long positions. The general trading range was within 1.4574-1.4620, allowing the pair to leave this zone just for a while. The pair\'s outgo from this sideward channel was influenced by the microeconomic statistics, released that day. Finally, the US dollar managed to gain 12 points versus the Euro.
Some pressure on the EUR/USD pair growth was put by the fundamental data during the European deals opening. Thus, Germany wholesale price index demonstrated a confident increase to 0.7% against the last period reading of -0.5%, higher than the experts forecasts of 0.30% rise. This has become the second trial of this indicator to leave the negative zone since May 2009. This indicator measures the inflation pace from the aspect of wholesale trading. The Italy industrial production figures also came in much better than it was estimated before, stood at 1.00% against -0.6% in the last period.
Mostly, these two factors let the pair hold near a strong resistance for a while, where the trading took place at that moment.
American microeconomic statistics surprised with a great many of positive indexes. The import price index rose to 2.00%, compared to the last period lowering of -0.6%. The Michigan University Sentiment Index exceeded the mark of 70 reaching 70.20, it is 5 points higher than the last week result. The wholesale reserves are going out of the negative zone steadily, this time they contracted to -1.4% against -2.10% in the last period. A significant impact on the market was put by the monthly budget report, which did not come in line with the economic predictions and moreover, fell to July indicators. Therefore, the US budget deficit at 111.40 bln.dollars in August, 2009 versus 180.70 bln.dollars in the previous month. Presently, the total budget deficit amounts to 1,378 trn. US dollars.
After the data release followed a sharp dollar strengthening, however, by the end of the trading hour of reports issuance the European currency returned all lost positions.
Taking into account that the whole trading day moved within the sideward channel with the bounds mentioned above, the technical picture was not changed significantly. At this graph it is visible that Friday candle signals about possible correctional trend with the down-going movement to 1.4350-70. By now, the pair has touched the bottom line of the rising price channel of August 13, which appears to be the first support level at present on the downside.
The support levels: 1.4534, 1.4449, 1.4369.
The resistance levels: 1.4620, 1.4637, 1.4664
Today, I recommend to buy the pair at 1-hour timeframe closing above 1.4590 with the target – T/P 1.4630 and S/L 1.4553.
Sell the pair at 1-hour timeframe closing below 1.4519 with the target – T/P 1.4470 and S/L 1.4565.
Best regards,
Analyst: M.A. Magdalinin
