In spite of strong US fundamental statistics on Friday, the EUR/USD currency pair behaved rather calmly. The Asian trading session and the first part of the European one went in the sideway channel of 1.4859-1.4919. Only after the release of the market labor data the pair broke through the low support level, but having touched the 100 day exponential moving average, which at that moment was passing at 1.4824, reached the trading day’s highs again, but the pair could not pierce it, and corrected to the closure to the area of 1.4874. Totally, the US dollar grew against the single currency by 26 points, the trading volatility came to 100 pips.
The fundamental review:
According to the Department of Labor data the US non – farm payrolls in October reduced to -190K. The experts predicted the decline only to -175K. The previous period was marked by the decrease of -263K. Such reduction of work places once again confirms that the US economy is on the key way of recovering. The US unemployment rate for September 2009 remained unrevised at 9.8%, but in October it rose by 10.2%. The average hourly earnings in the USA also increased in October by +0,05 points to 18,72 USD. The average weekly hours in October 2009 have not changed, remaining at the level of 33.0 hours. After these publications the pair dropped to the level of 1.4841 versus 1.4861 before the macroeconomic indicators release, then on the back of a sharp rise at American stock market as well as new historical lows of the Gold, the EUR/USD returned to the highs form which it was decreasing till the closure of the trading day.
The technical picture:
After two days trade in the lateral channel of 1.4808-1.4919 the pair is trying to break its upper resistance level through. In case, if it happens, then we will observe the further pair’s upturn to the zone of 1.4983 and to 1.5017. In that case, if the pair is not able to overpass this level, then the first support level on the way of pair’s decline will be the boundary at 1.4859 and then 1.4808. Do not forget about the 100 and 200 day exponential moving averages which currently are coming at 1.4833. I want to draw your attention to the fact that the 100 day exponential moving average has broken the 200 day one from the bottom up, which once again tells us about the continuation of the pair’s upward movement.
Bollinger bands are showing us a very strong liquidity at the early deals and the further pair’s growth is kept by the upper band. Also the pair’s uprising will be impossible without the definite correction.
MACD indicator is in purchases area and any solid pair movement downwards can be considered as a good zone to buy the Euro against the US dollar.
Today’s recommendation:
The support levels are 1.4859, 1.4808 and 1.4769.
The resistance levels are 1.4951, 1.4983 and 1.5017.
Today I recommend to buy the pair at the 1- hour timeframe closing above the level of 1.4952 with the target — T/P 1.5005 and S/L 1.4910.
Sell the pair at 1- hour timeframe closing below the level of 1.4881, with the target — T/P 1.4809 and S/L 1.4920.
Best regards,
Analyst: M. Magdalinin.
