The bulls\' mood, boosted at the trading week start fructified again. Just at the beginning of the Asian session the U.S. dollar managed to strengthen slightly against the European currency, although, with the European deals opening the situation changed cardinally. In the first part of the session Euro reached 1.4084, mostly it was due to the fundamental data and the commentaries of the ECB representatives. After the slight increase mentioned above was witnessed the weakening, which lowered the pair almost to the opening level. This decrease was considered by the players as a purchase signal, amid this, the EUR/USD currency pair showed a new local minimum around the 42d big figure. The total amount of the single currency gains versus dollar — 111 points, the volatility rate stood at 195 points.
The German retail sales fell in May by 3,2% annually on the unadjusted seasonal basis. With the inflation correction this index contracted by 2,9%. The data came in worse than expected putting pressure on the European currency. A positive mood was brought by the French business confidence index PMI in the manufacturing sector, the June reading is 45.9, consensus 45. The German business confidence index also rose in June to 40.9 versus the forecast of 40. The single currency was also supported by the Eurozone stock exchanges, which started the Q3 optimistically, due to the energy, banking and telecommunicational companies.
The market also responded the announcements of the German Finance minister about that presently, there are no signs of loan crisis in Germany, also the speech of Aksel Weber (Head of ECB) made sense, he noticed that he doesn\'t expect a positive GDP dynamics till the mid 2010, but we may see a moderate economic recovery very soon.
Concerning the USA. The pressure on the U.S. dollar was put by the ADP non-farm employment data showing a drop to -410K, the last mark was -485K. The purchasing manager index came in better than the estimates and reached 44.80, compared to the previous reading of 42.80. This signals some stabilization in the secondary sector. The pending home sales and construction expenditures data came out in the negative «red» zone growing only by 0.10% and falling by -0.09%, respectively.
Yesterday, the IMF changed the rules of currency rates monitoring in the EU countries, recognizing that usage of the certain currency features is not yield. One of the corrections was a refusal from using a special concept «fundamental imbalance» while evaluating the exachange rates, which was introduced into action since 2007 to make countries change their monetary policy. From this follows that the Union member-countries will have more opportunities to carry out their own monetary policy, than it was before.
The technical market picture remains unchanged. The upward movement of Euro is continuing. The range of 42d big figure is still in force. The yesterday\'s local minimum points that the bulls\' potential is not over yet. The Bollinger bands demonstrate the high volatility rate in the market, however, currently there is a slight decline. Most likely that today the pair would move in the sideward channel 1.4101-1.4197, but an outbreak to new highs of 01.06.09 is also possible.
The support levels are: 1.4101, 1.4053, 1.4001
The resistance: 1.4151, 1.4197, 1.4245.
Today, at 14.00 (Moscow time) will be released the Eurozone producer price index, which is to tick up by 0.01%. The uneployment rate data is scheduled for the same time, it is expected to rise to 9.30%. At 16.45 the ECB will announce its interest rate decision. The experts are looking for the rate to stay at 1.0%.
The American fundamental statistics is also full of different events. At 17.30 (Moscow time) will be issued the non-farm employment adjustments, the jobless rate and the jobless claims findings.
To make a conclusion, a piece of interesting information. Since 1 July the Sberbank of Russia begins to provide a new kind of broker services in the stock market — the internet-trading by means of Focus Ivonline trading system. The Public relations department of Sberbank notes that the new service is oriented to the investors, who are interested in obtaining an on-line access to the trading in the Moscow Interbank Currency Exchange (MICE). The trading system had already been tested by 350 bank clients.
Today\'s recommendations (short term trading):
Buy the pair at a 1-hour timeframe closing value above 1.4156 with a target – T/P 1.4196-1.4260 and S/L 1.4120.
Significant knockdowns of the pair to the key levels described before may be considered as a purchase signal.
Analyst: M.A.Magdalinin
e-mail: forexmax@rambler.ru
