In spite of that the trading for the EUR/USD opened with a small gap downwards on Monday, after that at the meeting of G20, the regulators did not reach one viewpoint regarding banks; the European currency was under the pressure by the American session. The pair was not helped by the talks about providing aid to Greece, the first credit tranche which was developed by the IMF and EU.
Only a small growth was observed on the North-American session, after the information that the rescue plan can be realized before May 19.
The trades closed with the euro advantage of 54 pips. The volatility totaled to 131 points.
Fundamental review:
In view of the absence of any important fundamental data about the Eurozone and USA, the market fully focused on the Greek problems, which was talked about a lot yesterday.
A good response of the European currency was on the German Chancellor Angela Merkel statement that the rescue plan could be realized by May 19, when Greece must pay off 8.5 billion euro according to the debt obligations. As Merkel said Greece must satisfy severe conditions to obtain the aid of the Eurozone partners including giving the proofs that it is going to take further measures of saving.
Also Merkel said that the IMF and Greece government should come to the agreement concerning “reliable and credible program” to solve financial problems of the country. She noted that these negotiations can last by the beginning of May.
The euro has got a little support after the comments of Bundesbank President and the member of Governing Council of the European Central Bank Axel Weber that there is no “such risk” of the euro slump, in spite of the Greek debt crisis and worries that similar market instability can involve Spain and Portugal, two of the Eurozone members with the high budget deficit.
The only one thing of the US fundamental statistics that should be noticed is that Dallas Fed manufacturing PMI rose to 21.1% in April against the experts forecast of the growth to 9.5%. In March, this indicator was at the level of 8.7%. I remind you that this indicator measure activity in manufacturing and industrial sectors and is calculated by the Federal Reserve Bank of Dallas.
Technical analysis:
The correctional upward movement continues and the trading is held in the rising price channel from April 22. The lower limit of the channel supports the pair, after the breach of which the falling can be renewed. If the support level of 1.3316 will not manage to stay during today’s deals the decline can be continued to the area of the low of 1.3199.
In case of the pair fixing above 1.3415 the ascendant movement can be continued to the are of 1.3453 and 1.3515. I would like you to pay attention to that the pair is trading between the 100 day exponential moving average which lies at 1.3367 and the 200 day moving average placed at the bottom of the 34th figure that speaks for possible sideways motion of the pair in short-term outlook.
Bollinger bans gradually reverse and move up from the lows of the last week also indicating the continuation of the correctional movement. At the moment of writing the article, the trading is driven in the upper part of the channel, the level of 1.3356 is the dynamic support.
MACD indicator points out divergence during the today’s Asian session, as despite the pair growth the level of the indicator could not climb above yesterday’s highs that one more time testifies to that the movement has correctional nature and any large volume can refresh bearish tendency.
Today’s recommendations:
Support levels: 1.3353, 1.3316, 1.3265.
Resistance levels: 1.3415, 1.3453, 1.3515.
Today buy the pair at 1-hour timeframe closing above the level of 1.3421 with a target – T/P 1.3494 and S/L 1.3384.
It is possible to sell at the closing of 1-hour timeframe below 1.3364 with a target – T/P 1.3313 and S/L 1.3394.
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