So, what did we have yesterday? Frankly speaking, nothing had happened yesterday. We call it Deja Vu. The trading day on Wednesday was exceptionally calm and did not carry in any corrections into the market situation according the currency pair EUR/USD. The opening of the trades at the level of 1.4408 and closing almost at the same level broght in more uncertainty of the future. The pair could drop to the level of 1.4358, which was the trading day low and also tested the resistance level and reached the maximum level of the day at 1.4449.
Why there is no activity at the market we only have to guess. In my opinion, now there are 2 variants which you should turn your attention to. The first one is that today will be a decisive day in this direction, which will be taken as the basis for the nearest several weeks. Today the European Central Bank will announce its decision about the interest rate, also the Bank of England releases its rate decision, which will cause increasing of volume trades. Jobless claims may also influence the situation. The second one is that the market turned short bacause of despair. So, check by yourselves. Last Wednesday and Thursday the pair was trading at the levels of the 41st and 40th figures, currently it is trying to reach the level of 1.45. Probably, such unclear trades volumes frightened away the major investors for the last few days.
Now let\'s speak about yesterday\'s fundamental statistics. The PMI services in the Euro — zone grew to the level of 45.70 and turned out to be a little bit higher than experts\' forecasts, who predicted that the increase would come to 45.60. But the retail sales determined the value of selling on retail basis, unfortunately, declined by 0.20% for the previous period.
The U. S. fundamental report also could not impart the motion to the market. As we could see, ADP Employment Change increased to -371K and turned out to be in the negative zone, economists expected that the reducing would come to -340K. This indicator will make a very profound affect on Friday\'s data about Non — farm payrolls, which could lead to decline of the European currency in the near future.
The technical picture remains to be under the domination of flat movement. The pair could not demonstrate any hope signs of going out the side way motion. The channel 1.4376-1.4446 is still the most actual. I want to turn your attention to the low border of our ascending price channel from July, 08, more likely, that the pair will test it today or we will see a significant bounce up to the upper line of this range. Bollinger bands are located parellely to each other and do not show any trend. If to look at the graphical analysis, then at 4-hours and 1-hour timeframes we will see the figure «flag», which appears when after a well — defined and rather significant trend the side way movement has started. As a result, the continuation of upgoing trend with new forces will be possible in the near future.
In conclusion. I advise you to hold back from entering the market until macroeconomic statistics are been released today, due to the serious fundamental data. Nobody knows, how the market will perceive a possible Euro - zone interest rate decline or remaining it at the same levels.
Today I recommend to buy the pair at 1-hour timeframe closing above 1.4452 with the target – T/P 1.4542 and S/L 1.4381.
Sell the pair at 1-hour timeframe closing below 1.4371 with the target – T/P 1.4310 and S/L 1.4426.
Best regards,
Analyst: Magdalinin M.
