The European currency has been losing ground for the third sequent session. As early as the first half of the European trading session started, the pair was trying to curb the bears pressure, now decreasing to 1.4795, then returning to the opening level of 1.4835 again.
With the beginning of the American trades the US dollar again started to strengthen against the Euro, fixing the regular weekly low level near 1.4680. The mentioned above area, which is the low level from October 29, kept the pair\'s decline.
Totally the single European currency at Tuesday\'s trades receded 132 points to the US dollar, the trading volatility came to 186 pips.
The fundamental review:
The German industrial production decreased by -1.8% m/m in October, compared to the analysts\' forecast, who were waiting for the increase by +1.0% m/m. In September this index was revised from +2.7% m/m to +3.1% m/m. It was announced in the German Ministry of Economic Affairs that probably the country\'s GDP would grow by 1.2%-1.6% in 2010.
The French Central Govt. Balance showed even more deficit, widening it to -134.80B, compared to the month earlier figure at -125.80B.
IBD/TIPP Economic Optimism in the USA in December dropped to 46.9, compared to the analysts prediction, who were looking for this indicator at the level of 48.5. The US ABC consumer confidence index reduced to -47.00, after the recorded data of decline to -45.00 in October.
Technical picture:
The downward trend on the examined pair is continuing. Yesterday, as on Monday, the several support levels were broken out, which led the pair to fall to the low level of October 29, 2009.
The 100 day exponential moving average also testifies about the downward trend continuation, it is located under the 200 day exponential moving average and it is down-directed.
Bollinger bands continue to point at the downtrend, but currently they are narrowing, locating in a parallel way to each other, which says about the market liquidity reduction and may lead to a slight trend reversal.
MACD indicator signals about the divergence, which was formed during the last two sessions, so the further pair\'s decline may be more problematic, than it seems to be. The indicator by itself is in the sales area.
Today\'s recommendations:
The support levels: 1.4680, 1.4600, 1.4540.
The resistance levels: 1.4737, 1.4778, 1.4823.
Today I recommend to buy the pair at 1- hour timeframe closing above the level of 1.4742 with the target — T/P 1.4816 and S/L 1.4691.
Sell the pair at 1- hour timeframe closing below the level of 1.4660, with the target — T/P 1.4600 and S/L 1.4719.
Best regards,
Analyst: M. Magdalinin.
