Yesterday\'s decline of the European currency against the US dollar was quite predictable. By the opening of the Asian trades the bearish sentiments started to be prevalent, which gradually had been reducing the pair for the whole trading day. During the trading session in Europe optimistic investors tried to resume the EUR/USD currency pair growth, but this led only to the next solid level for pair\'s sales, what actually happened. The upturn at the first part of the European session to the opening level of 1.4227 again was met by a strong resistance level, this allowed the pair to drop lower and fixed the minimum level at 1.4652 to the end of the American deals. Totally, the single currency lost 29 points versus the US dollar.
The released data on the Eurozone GDP which decreased by -0.2%, compared to the predictions of -0.1%, also can be connected with the Euro decline. I remind you that since September 2008 GDP, falling to record lows, did not come out to a positive zone more. German manufacturing orders also seriously suffered, dropping from 3.10% to 1.40%. Although this decline was a little bit smaller than had been expected by experts, but such a deplorable situation soothed the major players by no means.
Speaking about the USA, it is worth mentioning that MBA mortgage applications showed a solid growth by 16.40% against the previous period reading of -2.80%. Crude oil stocks were also marked by the decline to -1.00M, compared to 2.80M for the last period. The cost of consumer credit increased slightly and turned out to be at the level of -12.00B against the reading of -19.00B for the previous month.
The technical picture remains to be the same. The breaking through of some support levels led to pair\'s reduction, on the way of which the 200 day exponential moving average appeared to be, which had breached it. The bounce from the level of 1.4653 led to a small pair\'s increase prior to the trading day closure. Currently, the European currency has significantly grown at the trades in Asia, but the overall trend is still sideways. The variant of regular testing of the level 1.4774 is not excluded, which now is a solid resistance level and then there will be the rebound of it to 1.4700. However, if the pair can break through this area, then the upturn to 1.4826 is not excluded.
MACD indicator came out to a decent purchase zone again and now it is trying to fob off the further pair\'s growth on us. Bollinger bands also show the next pair\'s reversal.
Taking into account the fact that since the beginning of October the general background is still ascendant as well as the fact that the pair is located above the 200 day exponential moving average, then the further pair\'s rise seems to be more actual. But do not let you jump ahead, as today the ECB will announce its decision on the interest rate.
Key resistance levels: 1.4774,1.4800, 1.4826.
Key support levels: 1.4738, 1.4700, 1.4672.
Today I recommend to buy the pair at 1-hour timeframe closing above 1.4778 with the target – T/P 1.4840 and S/L 1.4740.
Sell the pair at 1-hour timeframe closing below 1.4680 with the target – T/P 1.4630 and S/L 1.4716.
Best regards,
Analyst: M.A.Magdalinin.
