On Friday, calm and moderate trading of the Asian and European sessions were interrupted by unexpected Euro strengthening against the US dollar. Refreshment of the local minimum at 1.4487 stimulated the purchasing of the European currency, allowing the pair to fix the high at 1.4649. The rest of the American trading session demonstrated the profit fixation by the major investors in favour of the American currency. The trading closed at 1.4577.
Concerning the Eurozone fundamental data worth noticing that the producer price index in the Eurozone changed significantly for the last period and came in line with the expert forecasts waiting for growth to 0.4% versus -0.8%.
The most attention was compeled to the US microeconomic data. Prior to the employment figures release the dollar ticked down slightly, taking into account that disappointing data could increase the investors\' unwillingness to risk. As a result, the number of work places in the USA was revised to -201.000 from -216.000, and the non-farm employment rate was at -263.000, compared to the drop estimate of -175.000. The jobless rate remained at 9,8%, coming in line with the experts predictions. The industrial sector payrolls in the USA stood at -51.000 in September, in the service sector — 147.000, and the average hourly wage rose by 0,01 USD to 18,67 USD. Manufacturing orders in the USA decreased slightly in August with the reading of -0,8%, consensus -0,6%.
Amid these reports publication, the EUR/USD pair fell considerably, that made possible to test the 45 th big figure range.
The comments of the FRS Head Rosengren managed to reverse the market backwards giving the European currency an opportunity to bounce back by the end of the trading week. According to Rosengren, the current policy of United States is correct, but despite some improvement, the markets and the economy need time to recover. He promised that the FRS will continue to lend a support until it is clear that economy is able to revival without help, and the pace of the FRS support measures cutting will depend on the economic conditions. There was some critisism of the commercial property market, as in Rosengren\'s opinion, it is one of the hindrances on the way of fast economic development.
To the technical analysis. Possibly, the continuing downside movement of the pair will be stopped for a while. The pair\'s rollback to the upper zone of the rising price channel of August 13 and its resistance level testing can bring the pair to the sideward flat for some time. The main resistance level is around 1.4675, its break through will show the first signs of the pair\'s drop reversal in a short term.
The falling was restrained by theFibo level of 38.2%, which can be constructed from the July pair\'s advancement. The testing of 1.4494 diapazon, where was seen the support level mentioned above, caused such a sharp uprise of the greenback purchase versus the single European currency.
Also, worth pointing out that the paiк is trying to test the 200-day exponential moving average at 1.4619, a confident closing above it would give us the first preconditions to open the long positions.
Today, I recommend you to buy the pair at 1-hour timeframe closing above 1.4657 with the target – T/P 1.4712 and S/L 1.4623
Sell the pair at 1-hour timeframe closing below 1.4578 with the target – T/P 1.4539 and S/L 1.4619.
Best regards,
Analyst: M.A.Magdalinin
