The trading day was done in a sideway channel 1.4067-1.4142 yesterday. The first part of the trading session was exclusively in favor of the European currency. Mainly, it was due to the fundamental statistics on the Eurozone. By the middle of the European trades the Euro strengthening was suppressed by the level of 1.4140 which caused another wave of dollar purchasing. During the second part of the trading day the US dollar tried to get stronger. To what it had led we saw ourselves. The US macroeconomic statistics, published at the American trading session, did not support the dollar\'s strengthening, thus it led to the Euro growth and this returned the pair to the opening levels at first, then to the upper border of the price channel. Totally, the European currency strengthened by 53 points against the US dollar.
ZEW economic expectations index (Germany) supported the European currency growth, this indicator came to the level of 56.10, crossing the line of 50, this was better than experts forecasts. I remind you that the increase of this index has not being ceased since January, 2008, when it was at the level of -63.
The quotations of the European shares also grew during Tuesday\'s early deals under the leadership of financial and primary companies, in which sectors a gradual recovery was expected, pulling up the Euro.
The reason for the decrease of our trading instrument was the US macroeconomic data. Building permits dropped to 0.56M, compared to the experts expectations of growth to 0.58M, against the previous rate of 0.57M. Then, amid the US Ministry of Labor released data we saw the descend of the wholesale prices by 0.9% in July, a month earlier this index rose by 1.8% and by 0.2% in May. The statistics was over by publication of new US Housing starts in July, 2009, which decreased by 1% to 581,000 on a monthly basis. Year — on — year this index dropped by 37,7%. According to analysts, this index had to be at the level of 605,000 in the last month.
The former FRS Chairman Alan Greenspan announced that the U.S. economy is likely to wait for two quarters of significant growth until the end of 2009 but this recovery could be stopped next year. He thought, that the motor and housing consolidation mainly was due to the governmental motivation measures, as the 3-billion program encourages consumers to buy new cars and houses. This is not the first statement for some time past, so his words were not perceived seriously by the market.
Currently, the technical picture drew us the price channel of 1.4043-1.4170, wherein the pair most probably would spend a long time. Yesterday\'s attempts of declining were kept by 61.8% correctional Fibo level. The growth attempts were enclosed in the channel with the upper border of 50.0% correctional Fibo level. Just over mentioned area, near the zone of 1.4184 went 200 day exponential moving average which could become a strong resistance level with increasing.
In conclusion, do not forget about depressant border of the ascending price channel from May 18, 2009.
Today I recommend to buy the pair at the closing 1-hour timeframe above the level of 1.4172 with the target — T/P 1.4213 and S/L 1.4140.
Sell the pair at the closing 1-hour timeframe below the level of 1.4118 with the target T/P 1.4067 and S/L 1.4149.
Best regards,
Analyst: M. Magdalinin.
