Typical Friday trading revealed its true colours. The first growth attempts in the European grounds opening were accompanied by the US dollar purchase that led to the pair\'s lowering almost to the session low which was fixed at the Asian market at 1.4617. Thereafter, followed a slight increase amid the US housing market data release, which showed sales tick up that caused the Euro strengthening against the greenback. By the trades closing the pair rallied from the opening level by 22 points that allowed the bulls to gain a victory.
Now, a piece of Eurozone fundamental review. GfK German consumer climate jumped from the last month reading of 3.80 to 4.30, coming in higher than the experts forecasts, which expected the index to remain unchanged. Money supply M3 contracted to 2.50% versus 3.00% month earlier.The economists were waiting for a decline just to 2.70%. This indicator drop puts pressure on the European currency. Last year indexes were at 9.30%. Italy retail sales saw no changes and stayed at -0.4%, compared to the last period, and the private lending has almost touched zero level reaching 0.10% against 0.70% in the last month. Durable goods orders, which exclude the transportation factors and defence industry orders in the USA, did not show any changes in comparison with the last period and stood at 0.00% versus 1.10%. The experts were looking for a slowdown to 0.90%. Durable goods orders including the transport costs, also fell to -2.40% versus strong uprise of 5.1% witnessed in the last month. Such diversified data was the reason of significant fluctuations in the market due to absence of major investors single view concerning the current situation. The Michigan University Sentiment Index demonstrated a moderate tick up to 73.50, despite all predictions. And the key factor for the European currency rally turned out to be the new home sales data, not coming in line with the experts estimates and rose to 429000 versus 426000 in the preceding month.
Concerning the technical pattern, worth pointing out that break through of the rising price channel of August 31 on Thursday affirmed itself during the Friday trading, as any trials of the pair\'s uptick to existing resistance level were promoting a huge Euro sale versus the American currency. As we could see, such sale took place three times, taking into account the Asian session where was seen the other resistance level testing at 1.4715 that resulted in considerable Euro slump. There are also two strong support levels, the first one— at 61.8% correctional Fibo level, which takes its rise from the August market fall last year, the second — the upper bound of up-going price channel of August 13, 2009, which used to be a resistance.
To sum up, I should notice that presently, the pair managed to break through below 200-day exponential moving average constructed at 1-hour graph, so I would not not recommend to expect the pair lowering continuation.
Today, I recommend to buy the pair at 1-hour timeframe closing above 1.4658 with the target – T/P 1.4724 and S/L 1.4612
Sell the pair at 1-hour timeframe closing below 1.4562 with the target – T/P 1.4522 and S/L 1.4608
Best regards,
Analyst: M.A.Magdalinin
