![\"\"](\"https://forex-images.ifxdb.com/userfiles/eur_19_01_2010.gif\")
The European currency was gradually strengthening during Monday\'s trades on the back of the market holiday in the USA.
Having opened with the gap downwards by 33 points at the Asian trading session, the pair started to gain positions step by step, having reached the daily high near 1.4399. The low was fixed at 1.4335.
The fact of the lack of any fundamental information on the part of the Euro – zone as well as from the USA also had the impact on the trading volatility.
The trading day closed in favor of the single currency which had grown against the US dollar by 30 points.
Fundamental review:
The only thing regarding reports which has to be mentioned about is the data on the Italian Trade Balance, the deficit came to EUR 790 mln. in November, 2009 from EUR 1,12 mln. a month earlier.
The comments of the European Central Bank Governing Council member Ewald Nowottny concerning the further economic development slightly gave encouragement to the market participants.
In his interview he noted that the Euro – zone firmly settled down to a course of economic recovery and there is no risk of the recession resumption. “I do not observe the prospects of the second wave of recession. We are passing through a slow but a steady growth”, - he said.
He also added that personally he did not want to the further Euro strengthening, as it has no problems with the current level now.
The European stock markets supported the Euro tightening up, which had demonstrated the increase for the whole trading session, due to mining and oil sectors and to prices surge on raw materials.
The head of the International Monetary Fund (IMF) Dominique Strauss-Kahn announced his point of view with reference to the world economy takeoff.
“The upward movement in the Largest Economies was sluggish till now. We have to exercise caution, as the economic advance has a fickle disposition”, - he said in his interview.
It appears to him that some countries are still not ready to present rather stable economic upswing, in this connection an excessively early refusal of anti-recessionary measures may lead to subsequent recession. In order to proceed with cutting of anti-recessionary measures in fact, the authorities of such countries are necessary to make certain of the increase in employment and consumer demand resumption. First of all, many governments also have to reduce the budget deficit, exaggerated because of anti-recessionary measures, before starting to cut them.
Technical picture:
Speaking about the technical picture, nothing has changed. The most part of the time the pair has been trading in the channel of 1.4365-1.4391.
The descendant price channel from January, 14 at 1.4555 is still happen to be and yesterday its upper border did not allow the pair to renew the upward movement.
The low line of the ascendant price channel from January, 08 restricts the pair decline which we consider in mid – term and, in case it breaks out, the decrease will reach the base of the 43rd figure.
The 100 day exponential moving average crossed the 200 EMA top to bottom which says about the pair appetite for further lowering in short – term outlook. In the event of the advancement, the area of 1.4426, where the moving averages are currently located, may have an impact on further pair strengthening.
Bollinger bands are closely approach to each other and are parallel. The breaking out to one or another side may determine the short – term direction for awhile.
MACD indicator is near the zero mark.
Today\'s recommendations:
The support levels: 1.4352, 1.4306, 1.4255.
The resistance levels: 1.4406, 1.4455, 1.4505.
Today I recommend to buy the pair at 1 - hour timeframe closing above the level of 1.4415 with the target — T/P 1.4467 and S/L 1.4385.
Sell the pair at 1 - hour timeframe closing below the level of 1.4374 with the target — T/P 1.4324 and S/L 1.4402.
Best regards,
Analyst: M. Magdalinin.