There were no any changes on Monday, as the pair growth before noon was fully leveled by slumping demand for risky assets in the US trades. Monday opened with the gap of 11 points in favor of the euro, after during negotiations on Sunday between Greek Prime Minister Georgios Papandreou and French President Nicolas Sarkozy, the later said that the leading countries of the Eurozone would do all that is necessary to prevent Greece isolation.
The highest point was recorded at 1.3704; the lowest level was at the bottom of the 36th figure.
The trading day closed with an advantage of the US dollar, which rose by 3 points against the euro. The trading volatility totaled to 100 points.
Fundamental analysis:
Germany’s industrial production increased by only 0.2% in January versus experts’ forecast of 1.5% surge.
The manufacturing production showed the growth by 0.9% in January. Seasonally adjusted industrial production rose by 0.6% in January compared to the previous month.
Back on the negotiations between Prime Minister of Greece and President of France, it is should be mentioned that Sarkozy assured the market participants that other countries of the Eurozone would support Greece. “At present, concrete measures of giving support to the country are being discussed”, – said the President.
The European currency got support from the speech of the German Treasury’s representative, who said on Monday that the proposal of the German Finance Minister Wolfgang Schaeuble to create the European monetary fund is not a short-term measure, and it should be considered as a subject to discuss. I remind you that the first suggestions on the European monetary fund creation were made in the last week, which would be created for helping such countries as Greece in case of occurrence of unforeseen problems in the economy.
The European currency turned out to be under the pressure of the concerns that the Federal Reserve Bank of New York can extend the circle of its counterparties, which it can use for taking out liquidity from the financial system. In other words, these measures will be directed, first of all, to finishing programs of quantity easing, as, sooner or later, the Central bank of the USA will have to take additional steps to normalization of the monetary conditions.
Technical analysis:
The pair tested the level of 1.3691 again, but it did not strengthen above it. If the tries were more successful, then such movement would lead the European currency to 1.3738 area (the highest point of March 3).
The short-term movement is upward as well as the mid-term channel, which has started on March 2, and in case of positive developments during this week the level of the 38th figure will likely be reached.
Yesterday’s fall was restrained by the 100 day exponential moving average, which lies at 1.3623.
Bollinger bands show a small reversal of the pair, however, maintain the downward correctional movement. The trading is continuing in the lower limit of the channel that speaks for a possible renewal of the upward movement in the nearest future. The middle band, placed at 1.3634, is the resistance.
MACD indicator is in the sales area, however, it is placed very close to zero level that signals about possible correctional movement with a renewal of the growth in short-term outlook.
Today’s recommendations:
The support levels: 1.3602, 1.3550, 1.3495.
The resistance levels: 1.3641, 1.3691, 1.3737.
Buy the pair at 1-hour timeframe closing above the level of 1.3636 with the target — T/P 1.3699 and S/L 1.3617.
Sell the pair at 1-hour timeframe closing below the level of 1.3603 with the target — T/P 1.3562 and S/L 1.3627.