Yesterday, in the first part of trading session was dominating the bull mood. Having fixed the local minimum around 1.4171, the pair managed to reach a new high at 1.4299, almost touching psychologically essential 43 big figure range. In the second part of the deals was witnessed lowering. The American session came in favour of the U.S.dollar, decreasing it to the opening level. The trading day closed at 1.4232, allowing the greenback to rise by 1 point against the European currency.
Everything started from the Eurozone fundamental data. The Germany consumer confidence index (GfK) came in at 3.50, better than the experts forecasts, who were looking for growth to 2.90; it stimulated the first Euro purchases against the American currency, giving the pair an opportunity to bear down the resistance level at 1.4235. Then, was released the import price index in Germany, which rose just by 0.40%, compared to the previous period. The experts were looking for an advancement by 0.60%.
The European currency rally was due to the stock market and also high oil prices, which tested the level of 70 dollars/brl. yesterday.
Concerning the USA, worth noticing the speech of FRS Head Ben Bernanke. According to him, currently, the FRS is doing its best to overcome the economic and financial recessions as soon as possible, and the next year the situation is to change for the better. Bernanke also focused on «strong» dollar and voiced his sentiment in favour of non-traditional and ambitious actions, which will help to accelerate the economic recovery.
The new home sales data let the U.S.currency strengthen slightly, increasing to 384.000, better than the economists\' estimate of 355.000. To remind you, this indicator measures the quantity of new houses for the whole year, which were sold during the last month.
Again problems in the banking sector of the USA. As it became known yesterday, a number of «flopped» banks in the USA had reached 64 from the beginning of the year. In the third decade of July was closed more 7 regional financial establishments.
Probably, this week the U.S.Treasury will announce about the most huge government bonds emission amounting to 205 bln.dollars, that in a short-term can lead to another significant weakening of the greenback.
At the technical pattern everything remains unchanged. The trading within the rising price channel of July 08 and testing of its upper bounds don\'t raise any concerns among the bulls. Presently, the next resistance level is seen around 1.4300, on the upside it may touch 1.4340. Remember that corrections to 1.4250, 1.4220 is also possible, as well as the channel\'s bottom line testing. Pay attention to the daily chart, precisely, to the Japanese candle, which was shaped up the day before. The situation is very uncertain and it will depend on this day which direction will choose the EUR/USD currency pair in near term. Hopefully it will be a sunward movement.
Best regards,
Analyst: M.A.Magdalinin
