Major macroeconomic events published yesterday were worse than forecasts. Ifo Business Climate index in April was 104.4 vs. forecast for 106.4. US Durable goods orders in March dropped 5.7% vs. forecast for a drop for 2.8. US Durable goods orders excluding transportation fell 1.4% vs. expected growth for 0.5%. This was the main reason the US stock market grew (S&P 500 added 0.01%), which influenced the euro (+18 points). Meanwhile, reports of some major companies were worse than forecasts (Procter & Gamble, AT&T, and Zynga).
The political situation in Italy has finished a two-month period of stagnation as Enrico Letta of the Democratic Party was appointed prime minister yesterday. Thus, 18 months after resigning in near-disgrace, the 76-year-old billionaire became the key figure in talks to form the next Cabinet. The widest gap is over economic policy after voters rejected austerity measures Monti imposed to assurage investors. Letta is seeking tax breaks for low-income families. Berlusconi has called for the abolition of a levy on primary residence. Several months ago it could have had pressure on the euro; now amid new circumstances it may have positive effect.
Today at 11:00 GMT+4 data on unemployment rate in Spain in Q1 is issued. It is estimated to be 26.5% vs. 26.0% in the fourth quarter 2012. At 16:30 GMT+4 data on US Unemployment Claims is revealed, it is estimated 352K, as in the previous week.
Technically, in order to continue growing the price has to consolidate above the trendline on the H4 (1.3052). the first target is 1.3083, the high of April 23, the second target is 1.3103, the indicator trendline of Kruzenshtern, and the third target is 1.3128, the high of April 19 and resistance of trendline on the H4.
If the testing level 1.3013 is broken, the price will move downwards to the support of thendline on the H4 1.2943. then, the support of trendline on the daily chart 1.2916/20.
