Analytical review of the EUR/USD currency pair with the forecast for Monday (Jan 4)

The last day of 2009 was quite volatile for the EUR/USD currency pair. With the Asian session’s opening, the European currency rallied its growth and fixed the day local high of 1.4439, having risen in price almost by 100 points versus the US dollar since the session has started.
The European trades were completely opposite to the Asian deals. The falling from the high mentioned above to the low of 1.4306 was predictable as released jobless claims data in the USA became more optimistic than economists expected.
Thus, On December 31, 2009, the trading closed with a small benefit of the American dollar. The volatility amounted to 133 points.
Fundamental review:
The US jobless claims dropped by 22000 during the week of December 20 – 26 to 432 000 against analysts forecasts of 1000 increase. During the week ended on December 19 the US initial jobless claims were revised from 452000 to 454000.
The US continuing jobless claims declined by 57000 to 4.981 million from December 13-19.
The economic sentiment indicator in the USA rose to the mark of 38.7 in December versus 38.3 in November 2009.
All data above caused the greenback gaining versus the euro and are continuing to put pressure on it.
Technical picture:
December 31, the dip was curbed by the support level at 1.4306 which is resistance level now and is standing against the further pair growth. The sharp pair tumble could not stop 200 day and 100 day exponential moving averages, which are located at 1.4378 and 1.4349 respectively.
Today’s deals opened with gap of 32 points which was won back right away after that the downward movement refreshed.
Because of it, Bollinger bands are showing a very strong liquidity. The trading is driving in the low part of channel and the low line of the Bands, which is at 1.4239, will resist the pair slump.
MACD indicator is still in the sales area and in case of 1.4306 will not be broken through upwards the sales will resume but with renewed vigour.

Today\'s recommendations:

The support levels: 1.4255, 1.4217, 1.4170.

The resistance levels: 1.4306, 1.4352, 1.4417.

Today I recommend to buy the pair at 1- hour timeframe closing above the level of 1.4338 with the target — T/P 1.4386 and S/L 1.4286.

Sell the pair at 1- hour timeframe closing below the level of 1.4254 with the target — T/P 1.4177 and S/L 1.4300.

Best regards,

Analyst: M. Magdalinin.