Yesterday\'s movement of the EUR/USD currency pair was in the grip of the fundamental analysis. The morning growth to 1.4996 refreshed the annual high. After that the pair stuck in the sideward range 1.4957-1.4996. Such trend was remaining till the US microeconomic data was released, which put everything in order. The European currency fall to the low of 1.4885 gave some time to the bears for relax, however, by the trading day closing, the bulls won back 50% of decline and closed at 1.4947. 20 points were gained by the American currency against the Euro.
On Tuesday, the Eurozone fundamental statistics was not perfect. The German producer price index lowered by -0.50% in September versus the increase of 0.50% in August. The experts were waiting for this index to come in at 0.00%.
The US microeconomic data induced a disruptive reaction of the market. The US market saw slight changes, but the released figures came in worst than the forecasts disappointing some major investors that made the pair tick down from the day highs.
The building permits fell unexpectedly to 0.57 mln. in September against the last month reading of 58.0mln.advancement. The experts were predicting the indicator to fix at 0.00%. Besides, this index has been following a flat trend since July within the downward diapason to -1.00% and uprise to 2.00%. The PPI, excluding the food and energy, dropped by -0.10%, compared to the last period upturn of 0.10% versus the 0.10%- uptick in the previous year. The new buildings rate stood at the same rate of 0.59mln. The growth of 0.61mln. was expected.
Prior to this data issuance, the pair was testing the trading day maximum at 1.4991, then moved down to 1.4949 fixing a new local minimum.
Estimating the technical picture, the single Eurozone currency almost touched the bottom line of the rising price channel of October 02, which is now at 1.4891. The pair also broke through some support levels and presently, is moving within the sideward range 1.4890-1.4948, testing its upper bound.
The Bollinger bands have reversed after the yesterday’s lowering and now, the Euro is testing the middle line of the bands, which stood at 1.4934, trying to leave the sales zone.
200-day exponential moving average laid aboard the bottom bound of the rising price channel, which current level is 1.4874 able to hold a possible pair’s drop in a short term.
Today’s support levels are: 1.4922, 1.4890, 1.4861.
Resistance levels: 1.4948, 1.4996, with the further testing of 1.5024.
Today, I advise to buy the pair at 1-hour timeframe closing above 1.4951 with the target T/P 1.4985 and S/L 1.4916
Sell the pair at 1-hour timeframe closing below 1.4887 with the target – T/P 1.4853 and S/L 1.4927.
Best regards,
Analyst: M.A.Magdalinin
