Monday\'s trades passed in a rather calm way. The absence of important macroeconomic statistics and a steady stock market did not lead to any significant changes in the currency pair EUR/USD. With the opening of the trading session there was a slight drop of the Euro from its Friday\'s highs to the level of 1.4567. It mainly can be connected with a little way latecomer Asian market which could not properly respond for the US dollar strengthening and also with an obvious Euro overbought to the previous trading session closing. During the European trading session we saw how the pair had been gradually reestablishing its lost positions and was able to reach the level of 1.4681, where it was met by the 200 day exponential moving average. To what it had led, you saw by yourselves – another decrease to the base of the 46th figure and the closure near this area. Totally, the US dollar grew against the European currency by 79 points. The trading volume was also at a high level, despite the first trading day of the week.
The publication of German CPI became the key insight at the yesterday\'s deals, which lowered to -0.40% versus the growth to 0.20% at the beginning of September. Remind you, that the Consumer price index (CPI) determines the inflation expansion rate level amid the consumer demand for goods and services. The uptrend has a positive impact to the national currency. On the other hand, it is worth mentioning the lack of inflation risk in the Europe\'s largest economy.
Concerning yesterday\'s ECB President Trichet speech, I want to notice some features. The first one is that Banks have to accredit the real economy. Secondarily, the ECB president announced that the policy of a strong dollar on the part of the USA is very important. In conclusion, it was told about the European economy recovery in the coming months, which unfortunately would be slower, than expected.
A slight strengthening of oil futures during Monday deals imparted the confidence to several major investors. It was expressed in testing of the first resistance levels at the European trading session.
Speaking about the technical picture, I want to mention a few main features. Yesterday\'s pair decrease to the upper bound of ascending price channel of August,13 was met by a strong support level, which also resisted during the second decline to the end of American trading session and at the opening of the Asian one today. As we can see, each testing of this level by the pair was accompanied by a sharp rebound to the level of 1.4638, which could be determined as the first resistance level. The next possible target for the pair will be the 200 day exponential moving average, which is currently located at 1.4672, near more serious resistance level of 1.4680.
The pair\'s entrance to the sideways trend is observed on the MACD indicator, as this indicator has come close by to the zero mark. Bollinger bands are located in a parallel way to each other, but with a high liquidity position.
Today, I recommend to buy the pair at 1-hour timeframe closing above 1.4647 with the target – T/P 1.4690 and S/L 1.4621.
Sell the pair at 1-hour timeframe closing below 1.4585 with the target – T/P 1.4522 and S/L 1.4619.
Best regards,
Analyst: M.A.Magdalinin.
