The yesterday\'s trading day was very important from the aspect of fundamental analysis. With the European session opening the dollar obtained support from the major players, lowering the pair to 1.4139, and then testing the support level near the bottom of 41 big figure. By the end of the session\'s first part the European curreucy had managed to rebound the morning losses, put up a strong resistance against the U.S. dollar. The players witnessed the day\'s maximum at 1.4248, coming from the U.S. confident data release. The deals closed with a slight strengthening of the single currency. All in all, the Euro gained 42 points versus the greenback, the volatility rate was slightly higher than before.
In the first part of the European session was issued the French consumer price index which fell by 0.40%, compared to the last period and coming in line with the experts forecasts, and also the Eurozone industrial production data, contracted by 0.60%, consensus 0.40% growth, that promted the European currency decline to the session low of 1.4088 against the U.S. dollar.
Prior to the American session start-up was published the MBA refinance index, which weakened by 3.5%. The U.S. trade balance figures gladdened the eurobulls coming in more positive than it was expected at -27.00B. The analysts were looking for a reduction to -28.40B. These datums turned out to be an accelerator of the rising movement. The monthly fiscal report came in the negative zone, reaching the new highs at -180.70B versus -94.30B in the preceding period.
Lastly, the Federal Reserve System of the USA announced its decision on the interest rate, keeping it unchanged at 0—0,25%.
At the technical pattern everything remains at its acceptable levels. The pair entered the new phase of the sideward channel with the bounds 1.4184-1.4248. This day is full of various essential statistics, so most likely that there will be a high-volume trading. Presently, the Bollinger bands are demonstrating a high liquidity rate, and the middle line may be considered as the dynamic suppoort level, as the pair is quoting in the upside channel. The break through of 1.4248 will lead to increase to 1.4276, and then to the bottom line of the up-going price channel, which stood near 23.6% correctional Fibonacci level around 1.4301. The support levels: 1.4212, 1.4184, 1.4135.
At 4-hour graph we can see the first signs of the downward tendency formed recently. At present, the European currency is testing the 200-day exponential moving average, which runs around 1.4225.
Yesterday, famous financial expert George Soros announced that the American economy has touched the bottom and it will demonstrate growth in the current quater due to the government stimulus package. According to his view, the next quater will show a positive increase mostly due to the stimulus measures. Also the White House adviser Larry Samers supported the American economy. He suggests that at present time is set up the foundation for the American economy recovery, however, this process will take time. Worth noticing that currently a lot of analysts have been forecasting the recovery of American economy in the second half-year period this year, but we\'ll see the real consequences of the economic downturn later.
Today i recommend you to buy the pair at 1-hour timeframe closing above 1.4253 with the target – T/P 1.4329 and S/L 1.4210
Sell the pair at 1-hour timeframe closing below 1.4176 with the target – T/P 1.4094 and S/L 1.4215.
Best regards,
Analyst: M.A.Magdalinin
