Considering the fact that new rumors about weaker, than it was predicted by experts, recovery of the world economy which appeared at the market yesterday, the major players again started to transfer their assets into more safety reserves, enabling the US dollar to continue its attempts of strengthening versus the European currency. If at the early Asian session the pair somehow was trying to hold its ground under the bears pressure and more than once started out from the level of 1.4955, then with the opening of the European trades there were no doubts about the benefits of the US dollar over the euro. Breaking through the level of 1.4949 without any problems, the pair rushed to the next support level, which was also overcome easily during the second part of the deals in Europe. At the opening of the American trading session the pair continued its decline on the oil market\'s and the US stock market heels. The total decrease of the European currency against the US dollar amounted to 95 points. The trading volatility came to 190 pips.
The fundamental review:
The Eurozone trade balance did not help the pair to strengthen, which showed the growth to 6.80 bln. in October against 1.08 bln. in September, this figure was revised up to 2.20 bln. Experts, polled by Dow Jones, predicted that this indicator would reduce to -0.90 bln.
Almost all US fundamental data came in the “red zone”. So the PPI demonstrated the upturn only by 0.30%, compared to the analysts\' expectations of this indicator rise by 0.60%. The US industrial production also showed the runup only by 0.10% from the September\'s increase by 0.70% (revised meaning). Experts were waiting for this index to drop by 0.40%. The seasonal fluctuations and the unemployment rate growth exerted strong pressure on this indicator.
The long - term TIC flows registered to the side of volume advancement. The transactions level grew from 34.20B to 40.70B for the previous month. These statistics appeared to be higher than experts had predicted.
The technical picture:
Having pierced the 100 and 200 day exponential moving averages, which yesterday were going near 1.4942 and 1.4923 respectively, the pair\'s decrease was stopped by the lower boundary of the ascendant price channel from October,02, which at that moment was coming near 1.4815. The rebound from this level caused the pair\'s uprise to the resistance level at 1.4912, which probably could keep the further pair\'s growth. I want to mention that this increase can be considered as the correctional one in short – term prospects and at the moment the pair has regained up to 50% of yesterday\'s decline, and the 50.00% Fibo level keeps its further upturn.
Also I want to draw your attention to such figure\'s forming as “triangle”, the low line of which we will take for the mentioned above border of the ascendant price channel and the upper one we will build from the high of November,11 near 1.5046, linked it with the next point at 1.5018. This triangle can be completed during this week, so I ask you to turn attention to these levels and try to trade from them in short – term outlook.
Bollinger bands are gradually narrowing, but they still retain a rather good liquidity. I recommend to consider their lines as support and resistance levels now.
MACD indicator proved itself rather well yesterday and currently a slight pair\'s recovery may cause another purchases wave, which the mentioned above indicator is showing to us now.
Today\'s recommendations:
The support levels: 1.4854, 1.4808, 1.4769.
The resistance levels: 1.4912, 1.4949, 1.4987.
Today I recommend to buy the pair at the 1- hour timeframe closing above the level of 1.4905 with the target — T/P 1.4941 and S/L 1.4876.
Sell the pair at 1- hour timeframe closing below the level of 1.4868, with the target — T/P 1.4830 and S/L 1.4898.
Best regards,
Analyst: M. Magdalinin.
