Yesterday the situation on the market was characterized as thin market. Federal Reserve Bank of Chicago President Charles Evans said that the US economy had improved “quite a lot”.
“I'm optimistic that the labor market has been doing much, much better and that unemployment is going to continue to go down,” Evans said in a speech in Chicago. “Currently we have the appropriate monetary policy in place.”
“So far it’s very difficult to argue that things are not functioning at least as well as they were before we undertook our asset purchasing programs,” Evans said. “And while asset values have gone up, it still looks relatively reasonable. But we’re going to continue to monitor that.”
As the result DJIA dropped 0.13%, the euro grew 40 points.
Today at 10:00 GMT+4 PPI in Germany in April is issued. It is expected to fall 0.1% vs. -0.2%. At 18:00 GMT+4 Treasury Secretary Jack Lew, at 19:30 GMT+4 James Bullard, President and CEO of the Federal Reserve Bank of St. Louise and at 21:00 GMT+4 William Daley, President of the Federal Reserve Bank of New York will speak. As usually investors expect further signals of QE3 trimming.
Taking into account that the growth of the euro was due to relatively low volumes, further rise of the euro may be complicated. If on the H4 the area of confluence of the Fibonacci extension with trendline and the price balance line (red sliding), the price meets the resistance of Kruzenshtern line (blue sliding) and may move further to the area 1.2929/42, the high of May 16, the level of confluence of indicator lines on the daily chart. If the rebound from any level is observed, the first bearish target is support of the trendline on the H4 1.2855, after it is broken the target 1.2808 opens, which is the area of confluence of Fibonacci extension with trendline. In the short term we expect the correction will be accomplished and the rate returns to the lows observed in the beginning of April.
