The European currency could amaze everyone yesterday. Despite the European stock market trade in a red zone the most part of the session, and closing of the American stock market with the big minus, the euro has surged to a new annual maximum around 1.5048.
The Asian session was enough easy for the US dollar, it could strengthen to 1.4890 level, after that the pair has returned back to opening area, showing gradually ascending tendency. The European trading platforms were under the bears pressure the first part of the session, however, they could not take the situation in their hands. The first sharp spurt was noted by the American trading session opening. The pair overcame the resistance level around 1.4948, and that caused the growth to the following level 1.4995. But after that the EUR/USD pair has not calmed down, and as it was noted, has reached the annual maximum, having pulled back to the 50th figure by the closing.
What caused the European currency strengthening. The answer is simple. Actually not the European currency has become stronger, and the great weakness has been noted in the US dollar. Crude oil quotations have refreshed the annual high, and November WTI future has closed the trading at a level of $81.37 per barrel. It became a principal cause of the dollar decrease against the euro.
Fundamental data also supported the European currency. The Beige book data became the basis of the upturn. As it is specified in the report, consumer spending indicated the improvement signs. The most significant sales growth was fixed in San Francisco, New York and in Cleveland. The MBA refinancing index also could not put the essential pressure upon the investors, it fell by -13.70 %, against -1.80 % decrease for the previous period. Crude oil reserves grew to 1.3 million barrels.
The technical picture shows us confident growth. Almost having reached the bottom line of the rising price channel of October 2, the pair has resumed its growth, having overcome few resistance levels during trading day. The Bollinger bands have reversed once again and by the present moment the pair is trading in their bottom part, gradually entering the buying zone. The dynamic resistance level is at 1.5000. Gradually narrowing of bands speaks about the trading volumes decrease.
MACD indicator is located in the purchase zone, and the next essential pair downward move may be considered as the area for the next high-yielding asset buying. 200-day exponential moving average is located under the trading area at the 49th big figure base.
Today’s support levels are: 1.4995, 1.4965, 1.4921.
Resistance levels: 1.5047, 1.5085, with the further testing of 1.5100.
Today, I advise to buy the pair at 1-hour timeframe closing above 1.5051 with the target T/P 1.5095 and S/L 1.5004
Sell the pair at 1-hour timeframe closing below 1.4978 with the target – T/P 1.4946 and S/L 1.5012
Best regards,
Analyst: M.A.Magdalinin
