Yesterday\'s trading day was done in a rather calm channel, because the lack of macroeconomic statistics. Descending to the support level near 1.4195, then to 1.4182 during the first part of the trading day, the currency pair EUR/USD was met by several purchases which could increase it to the level of 1.4249 and to fix next local maximum level near 1.4279. Such surge was caused by Fed Chairman Bernanke statements, but I would speak about it later. Then, nearly at the middle of the American trading session the pair again managed to drop to the level of 1.4182, but breaking through below it was not fixed. The trading day ended almost at the opening level near 1.4227. The U. S. dollar managed to increase against the Euro only for 5 points. The volatility rate amounted 114 points.
Speaking about the U. S. fundamental statistics, I must tell you that the Chicago Fed National Activity Index released yesterday\'s was at -1.80 level, compared to experts\' forcasts of -1.30 level. The comments of FRS Chairman Bernanke about monetary policy caused large volume of trades. He said yesterday that the USA has all tools to develop a strategy for overcoming the crisis. Then, he hinted on a possible increasing of the interest rates whereon the market reacted very rapidly, as we could see, allowing the dollar to renew its local minimum of the trading day. Bernanke also said about a significant growth of financial stock indicies and about a moderate pace of inflation in the country. It is clear that investors\' risk appetite currently appears more and more often, which may lead to a smooth economic recovery in 2010. In conclusion to this speech, I want to add that the market took all information in two ways, because from one side there were a lot of statements in favor of the dollar, but from the other side there were some moments allowing to await for fast global crisis finish, which recently more and more increases major investors\' risk appetite.
Everything stays at the same positions as I wrote yesterday. There is a sideways movement with small attempts of breaking through the channel\'s borders of 1.4182-1.4249. So the technical picture is adequate for continuation of the Euro increasing. Bollinger bands are starting to widen its borders step by step which may be used as dynamics support and resistance levels.
Currently, the pair is trading at very narrow zone of 1.4182-1.4220 and breaking through either upward or downward is not excepted.
The support levels are near these zones: 1.4182, 1.4147, 1.4100.
The resistance levels are: 1.4220, 1.4249, 1.4270.
Today I advise you to buy the pair at 1-hour timeframe closing above the level 1.4236 with the target - T/P 1.4280 and S/L 1.4203.
Sell the pair at 1-hour timeframe closing below the level 1.4178 with the target - T/P 1.4107 and S/L 1.4209.
Best regards,
Analyst: M. A. Magdalinin.
