Yesterday’s market movement was good depicted technically and tight fundamentally. In the morning trading major Asian investors were trying to continue the pair growth, but having reached 1.5037 they gave up, as a result, the EUR/USD tumbled to the opening level, and in the European trading session it fixed the day local minimum at 1.4969. As soon as the pair touched the support level at 1.4965, which stood against the pair’s pressure easily, it started to rise with renewed vigour. During the American deals, the Euro went back to the previous level above the 50 big figure and by the closing the pair had been trading at 1.5030. On the whole, the European currency managed to gain not more than 10 points against the US dollar.
Concerning the fundamental data, worth pointing out the active account deficit of the Eurozone, which lowered to -1.30 billion dollars versus the increase of 3.70 billion dollars a month earlier. The experts were waiting for further advancement of this index to 4.40%. Italy retail sales also fell by -1.3% against the drop of -0.30%. The analysts were expecting for this indicator to come in at 0.00%.
Amid these reports, the pair ticked down to 1.4965. The European stock markets pressure, the oil and gold falling with the profit fixation gave a time-out for the American currency.
Prior to the jobless claims data release, the pair had rallied to the opening level, and a move to 531.000 did not succeed to influence the European currency significantly, the more so, because the market participants considered this uprise as not very considerable one after huge slumps of this indicator for for some time past. The economists were waiting for another downward movement to 518.000. The leading index measuring the general economic condition compounds 10 leading indexes and includes average working hours per week, new orders, consumer expectations, housing permits, share quotations and interest rates spreads, yesterday this index came in line with the experts forecasts and rose to 1.00% against the last month upturn by 0.4%. The house price index fell by 0.3% (in dollars) versus the preceding month reading of 0.3% on the upside.
The technical image remains the same. The pair’s decline was restrained by two support levels: 1.4995 and 1.4965. As we can see, the market participants are not ready to extend trading below these rates. The drop was also prevented by the 100-day exponential moving average (green line), touching which the pair recovered its rising trend. Undoubtedly, a surge up to 1.5048 by the trading day closing was restrained by the resistance level. Its morning testing led to the pair’s lowering to 1.4995.
The Bollinger bands demonstrate the sideward trend with rather high market liquidity and they are ready to turn to any direction.
MACD indicator highlights the existing divergence of the pair increase that can result to its fall in the nearest time.
There is one more curious nuance. If we look at the day graph and find the last Thursday candle (15.10.2009) it may be surprising to see that the yesterday’s Japanese candle absolutely matches the candle of 15.10.2009 and signals about possible pair reversal , as it has “hung” name. Probably, the market can behave itself as in the last week after this type of candle forming.
Today’s support levels are: 1.4995, 1.4965, 1.4921.
Resistance levels: 1.5048, 1.5062 with further testing of 1.5100.
Today, I recommend to buy the pair at 1-hour timeframe closing above 1.5050 with the target – T/P 1.5085 and S/L 1.5021
Sell the pair at 1-hour timeframe closing below 1.5022 with the target – T/P 1.4982 and S/L 1.5044.
Have a successful trading and good weekend.
Regards,
Analyst: M.A.Magdalinin
