![\"\"](\"https://forex-images.ifxdb.com/userfiles/eur_26_01_2010.gif\")
On Monday the trading on the EUR/USD currency pair was mainly going in favor of the Euro, but the movement is still in a narrow range, as investors are waiting for the FRS decision on rates on Wednesday.
The Asian trades were gone in the sideway channel of 1.4136-1.4170, however, with the opening of the European session, the US dollar started to strengthen its positions on the back of the reduction of the German Consumer Confidence index.
The session low of 1.4124 was fixed during the American trades, but weaker macroeconomic data from the labor market caused another Euro\'s purchase against the greenback, allowing the pair to renew the local high near 1.4190.
The trades closed with the pair\'s gain by 6 points from Friday\'s closing level. The trading volatility amounted to 66 pips.
Fundamental review:
The German consumer confidence remained rather weak at the beginning of 2010. According to the survey results, published on Monday by Gfk, a market research organization, the consumer confidence index in February dropped to 3,2 from 3,4 in January. It was announced earlier that this index in January came to 3,3. Analysts in their turn were looking for the decrease of this indicator to 3,1.
As it was mentioned in the report, widely – spread expectations of the unemployment rate growth in the coming months decline the consumers optimism regarding the earnings, on the other hand, the weak consumer\'s demand also encourages the retail sales companies to reduce prices, supporting consumers\' tendency to purchase.
Existing home sales in the USA in December decreased more significantly than it was predicted. Experts link such lowering to a 3 – month upsurge which was observing at the end of 2009.
Following these figures, the existing home sales in the USA in December fell by 16,7% to 5,45 mln. houses in a year, compared to 6,54 mln. houses in November, 2009. Economists in their turn were waiting for this index to drop by 11,6% to 5,78 mln. homes.
I want to note, that real estate brokers are expecting the home sales rising with the advent of spring, as the unemployment rate advance will be gradually coming down and a lot of Americans will use the opportunity of reimbursement programs again, provided by the State for housing buying.
Dallas Fed Manufacturing Activity in January increased by 8,3% from 3,2% in December, 2009. this index rose to 7,4 from 0,1. I remind you that this indicator gauges the state of the manufacturing and industrial activity, calculated by the Federal Reserve Bank of Dallas.
Technical analysis:
The price channel of January, 21 is continuing to signal us about the ascendant pair\'s motion in the short — term outlook.
Yesterday the pair broke out the 23.6% correctional Fibo level and the next resistance level will be the 38.2% Fibo area, which is located at 1.4173. The 100 day exponential moving average is also near this area.
Speaking about the technical figures, it should be said firmly that the figure “flag” has been formed for the last 3 trading days, which testifies to the tendency continuation in the medium term and as we can see this trend on the European currency is downward in last several weeks.
During today\'s early trades Bollinger bands are gradually reversing down, pointing to another descendant trend development.
MACD indicator moved from the zero zone to a negative one.
Today\'s recommendations:
The support levels: 1.4069, 1.40269, 1.4006.
The resistance levels: 1.4131, 1.4169, 1.4217.
Today I recommend to buy the pair at 1 - hour timeframe closing above the level of 1.4126 with the target — T/P 1.4175 and S/L 1.4083.
Sell the pair at 1 - hour timeframe closing below the level of 1.4071 with the target — T/P 1.4008 and S/L 1.4130.
Best regards,
Analyst: M. Magdalinin.