Despite the USA favorable news, released yesterday, the pair could not break through the channel range 1.4690-1.4757. Gradually calming down pair growth can lead to the slight long sideward trend and then to the correctional process beginning, of course, after the powerful surge. During the first half of the European deals the dollar continued losing positions, gave the European currency a chance to fix the next sessional maximum around 1.4769. But then the pair fell below the opening level, refreshed the local minimum at 1.4691. The session closed with a small lead of the euro. The growth amounted to 35 points.
The only positive news of the Eurozone was the publication of the trading balance data, which, despite the economists forecasts, expecting decrease to 1.2 billions, rose to 6.80 billions that once again urged players on the euro purchase against the US dollar.
In the second part of the trading day the USA macroeconomic data were released, which caused the next wave of EUR/USD purchases. Building permits coincided with the experts forecasts and grew to 0.58 millions. The number of unemployment benefits decreased by 12 thousand and that also helped the European currency, in view of the increased investors’ propensity to risk. 545.00 thousand is the final result for the last reporting period. I would remind you that experts expected decrease of only 2 thousand. Housing starts ticked up to 0.60 millions, against the 0.59 millions the period earlier. The productivity index of the Philadelphia FRS reached 14.10 points. Experts predicted the growth only to 8, against 4.20 for the similar period.
Speaking about the technical picture, I want to point out some key moments. The first is that many already speak about the European currency over-buying and note the possibility of correctional trend in favor of the US dollar. At this graph the pair shows a gradual, smooth turn, and in short-term prospect we will recoup from the resistance levels, at the first growth attempts. I would advise to consider the yesterday\'s maximum as the precondition for small short positions opening. The second is that the range of 1.4960, though is not key, but acts now as the active support level, its break through can cause the pair decline to 1.4643, the next support level.
MACD indicator gradually passes from the purchases zone to the sales zone, it have very good divergence with the graph. As to the Bollinger bands, it is possible to note the decrease of the liquidity rate in the market and small turn towards sale. Its dynamic levels of support and resistance speak for themselves.
In conclusion I wish to remind that today is Friday and do not forget that there is two days off ahead the market, so after the good week growth, we can see the profit fixing.
Today, I recommend to buy the pair at 1-hour timeframe closing above 1.4769 with the target – T/P 1.4800 and S/L 1.4726.
Sell the pair at 1-hour timeframe closing below 1.4695, with the target – T/P 1.4654 and S/L 1.473.
Best regards,
Analyst: M.A.Magdalinin
