During Thursday\'s trades the European currency continued to dominate over the US dollar, due to short positions reduction, prior to Christmas holidays.
The level of 1.4360 was broken out during the first part of the trading day which led to the growth to 1.4384 and then to new location high fixation at 1.4418, however, the resistance level near 1.4408 could hold its ground under bulls press.
The trades at the American session came in favor of the US dollar, after rather positive fundamental data release on jobless claims. The pair dropped from the mentioned high level to 1.4360, where the trading was finished.
Thus, the total European currency\'s increase amounted to 15 points. The trading volatility was marked by 94 pips.
Fundamental review:
There were no published statistics from the Euro - zone on Thursday, that is why all attention was riveted to the US fundamental data.
Durable Goods Orders Excluding Transportation and Defense grew by 2.00%, compared to experts forecasts of increasing by 1.00%. This index was revised from -1.30% to -0.70% in November.
Durable Goods Orders including mentioned components showed the upturn only by 0.20% against the prediction of 0.50%.
In general, this decrease was mainly connected with a falling demand for commercial planes, but the pressure in this sector was leveled by the orders\' upsurge in computer industry.
Initial jobless claims (week Dec 13 – 19) fell sharper than experts had predicted.
According to the US Department of Labor data, the initial jobless claims declined seasonally adjusted by 28 000 to 452 000, compared to the reading of 480 000 last week. Analysts were waiting for the decrease only by 10 000.
Continuing Claims, id est the number of people who have been drawing the allowance for more than one week, slumped by 127 000 to 5 076 000 against the figure of 5 203 000 last week.
Such state of things is another sign of a gradual US labor market recovery.
Technical picture:
When the upper line of descendant price channel was breached near 1.4316 on Wednesday, the uprise motion has been remaining for the second session in a row. As seen, Thursday\'s growth was kept by the 200 day exponential moving average which is located at 1.4418.
The 100 day exponential moving average supports the pair, which is inclined at 1.4341.
More likely, the movement will be lateral with borders of 1.4323-1.4418 during several days, and the market will determine the further direction only after New Year\'s holidays.
Bollinger bands are gradually narrowing, the upper line of which is continuing to restrict the pair\'s advancement. The middle line, located at 1.4378, is the support level.
MACD indicator is gradually coming to a zero mark, showing to a sideway motion of the pair in short-term outlook, but it is still in the purchases area and any pair\'s decline can give a new impact to the upward movement.
Today\'s recommendations:
The support levels: 1.4352, 1.4323, 1.4275.
The resistance levels: 1.4417, 1.4466, 1.4503.
Today I recommend to buy the pair at 1- hour timeframe closing above the level of 1.4397 with the target — T/P 1.4437 and S/L 1.4369.
Sell the pair at 1- hour timeframe closing below the level of 1.4370 with the target — T/P 1.4327 and S/L 1.4393.
Best regards,
Analyst: M. Magdalinin.
