On July 24, the US dollar grew against the euro. The US currency got support from strong data on US Housing market and growing yields of treasury bonds.
Trading session closed in favour of the US dollar, which strengthened against the euro 25 points; market volatility was 81 points.
Fundamental review:
In the first half of the day the euro got support following the data on Manufacturing and Service PMI in Germany. According to Markit, preliminary Composite PMI in Germany grew up to 52.8 from 50.4 in June. Services PMI reached 52.5 vs. 50.4 in June; Manufacturing PMI equals 50.3 vs. 48.6.
On the whole, data on PMI indices in the Eurozone suggests small-scale growth. Composite PMI rose up to 50.4 from 48.7.
However, in the second half of the day strong fundamental data on the US dollar led to the US currency strengthened. Thus, New Home Sales in the US in June grew considerably. According to US Department of Commerce, New Home Sales grew in June 8.3% and totaled 497K homes annually. Compared to the same period last year sales grew 38.1%. The economists forecast the sales would be 485K a year, up 1.8% compared to May.
US manufacturing PMI in July grew as well. According to Markit, preliminary Manufacturing PMI grew up to 52.3 from 51.9. Reading higher than the level of 50 suggests the growth in the sector.
Technical analysis:
The pair has stopped in the short-term sideway price channel. However, on the whole medium-term up tendency preserves. The lower boarder of the up channel passes near the low of July 23, 1.3163 and yesterday’s low 1.3176. Meanwhile, the upper boarder is located near the yesterday’s high, 1.3255.
As the result of such active measures taken by buyers and sellers, we had to revise some levels of resistance.
Now the first level, which may prevent EUR/USD from further development, is the level of 1.3236; from it the pair may reverse to the month’s high and then it may move closer to the area 1.3269. The most remote target is 1.3300.
The first intermediate level of the support is the area 1.3199, from it the pair may reverse back to 1.3165 and then drop to the area of 1.3141 and 1.3114.
Bollinger Bands has gradually widened its boarders, which points the activity growth on the market. However, bands are paralleled suggesting formation of a bullish market tendency in the short term. Trading is conducted in the lower part of the channel and median line located in the area 1.3213 serves as dynamic resistance even now.
Despite high activity both the bulls and the bears, the MACD indicator does not produce particular signals for buy or sell. I do not recommend taking it into consideration.
Today’s key levels of support and resistance:
Levels of support: 1.3199, 1.3165, and 1.3141
Levels of resistance: 1.3236, 1.3269, and 1.3300
50-day Moving Average (yellow line) – 1.3207
30-day Moving Average (green line) –1.3211
Opinions, considerations, analysis, and any other information presented in form of market commentaries should not be regarded as instructions. Analyst does not responsible for any gains or losses which may be amid direct or indirect usage of the information.
You may contact the author: maksim.magdalinin @ analytics.instaforex.com
