The yesterday\'s trading day continued its downward trend, shaped the day before. At the beginning of the trading session the European currency tried to overcome the resistance level at 1.4195, but failed and dropped to 1.4147, and then to 40 big figure range. The local minimum was fixed at 1.4005. Only by the end of the trading session the pair had rallied slightly to 1.4047. All in all, the U.S.dollar rose by 122 points against the Euro, the volatility rate amounted to 191 points.
The European currency lowering was mostly due to choppy stock market, American indexes, which declined during the last trading. Some uncertainty was brought by crude oil. The U.S. fuel reserves increased by 1.5% and provoked the oil price decrease, urging the investors to switch to less risky currencies.
The Eurozone did not manage to gladden us with the consumer price index, which yesterday dropped to -0.10%, compared to the previous period. To remind you, the last indicator showed growth by 0.40%, the experts were looking for advancement of 0.20%.
Concerning the USA, worth noticing some adjustments in durable goods orders. The drop amounted to -2.50%, despite the analysts forecasts waiting for a reduction of -0.60%, compared to the preceding period. The MBA refinance index showed a down-going trend to -6.30% in comparison with the last reading.
All these negative factors, as it was said above, affected the EUR/USD pair\'s lowering refreshing the local minimum.
Looking at the technical pattern everything is still discrepant. If this week closes around 40 big figure there is a probability of further decline continuation the next week with the target around the 39 big figure. The rising price channel was broken through downwards, that stimulated such sales volume. All support levels were overcome easily and only a high of July 14 at 1.4015 succeeded to stop furious falling pace of the pair. The correctional Fibo levels 38,2 and 50.0 were also overpassed. Only the level of 61.8, which is in the range of 1.4015, managed to support the pair.
Generally, according to the technical image, the investors\' concerns were also coming from failed trials of the single currency to outbreak above the 43 big figure. This zone has been tested for 2 times this week, but an outbreak did not take place. Probably, the bulls took time in their upward motion, but strong descending movement is also possible. The conclusion can be done only by the trading week closing, presently, it is bear candle.
Today, I would recommend to buy the pair at 1-hour closing above 1.4071 with the target – T/P 1.4141 and S/L 1.4034.
Sell the pair at 1-hour closing below 1.3998 with the target – T/P 1.3940 and S/L 1.4056
Best regards,
Analyst: M.A.Magdalinin
