Let’\'s start with the yesterday trading session analysis. As everybody knows the day before was full of mystery and secrets. All planned events took place but nobody knows what conclusion should be made. Currency pair EUR/USD continued its fall with Asian session opening, it reached local minimum in the range of 1.3247 where strong level of support is located. 200-day daily moving average which we can see at 1-hour timeframe near the levels mentioned above, served as a barrier for EUR/USD fall. Generally, it is worth saying that bulls succeeded to push EUR higher than the resistance level, which is at 1.3436 (maximum for 05.05.09) and fix new maximum in the range of 1.3468. Later on our trading instrument did not manage to fix at these levels, but latest test on resistance levels may be scored in favor of bulls. New maximums and steady “bulls” mood give a confidence to investors in risks assets favor. Therefore, EUR rises against USD by 74 pips more (open 1.3312, close 1.3386). Trading volatility was very high –at 217 pips.
The general situation is clear, now it\'s time to consider yesterday\'s significant events. After ECB announced about refinance rate cut by 25 bp., which was expected to be lowered, the EUR/USD sticked up sharply. Why? Euro began to rise not to decline versus dollar, as this decision was not something new, it was a predicted event, which came in line with investors\' expectations having a positive mood for Euro. Further, we were able to witness an awful sharp turnaround of the pair, when it fell in a second from 1.3378 to 1.3261. A strong decrease of Euro was due to the J-K Triche\'s speech, when he told that ECB is planning to purchase secured bonds which are Euro-denominated. These measures were used bybank for the first time during the direct asset purchase, although this move was made by other central banks (FRS, the Bank of England). According to the ECB Chief Triche this measure will be additional and it was accepted only for the economic recovery. This was made also for the quantitave relaxation. After sharp fall of Euro, stimalated the new purchase wave, the pair was successful to recover to 1.3314, and renew the local highs.
To the stress-tests results. It was found out that none of 19 banks tested by the american government, is a bankcrupt. The following data should convince the investors that american financial system is surefooted, and besides of being steady, it has started to gain alredy. The quantity of banks which will need to attract more capital funds is uncertain, but we knew that the largest U.S. bank Bank of America is included in that list yesterday. Thus, don\'t make any hasty generalizations regarding the economic recovery of the USA.
About the technical interpretation: everything remains stable — the same upside channel. The new local maximum and uncertain position don\'t give any incentive to make a prediction for tomorrow. The resistance levels are 1.3396, 1.3436, 1.3467. Remember about the middle Bollinger band at 4-hour timeframe which is now disallows the pair\'s tumble.
Recommendations for today (short term trading):
Buy the pair at 1-hour timeframe closing price above 1.3396 with a target – T/P 1.3436-1.3467 and S/L 1.3341.
Sell the pair at 1-hour timeframe closing price below 1.3338, with a target – T/P 1.3254 and S/L 1.3377.
Analyst: M.A. Magdalinin
e-mail: forexmax@rambler.ru
