On Monday, in the early Asian deals the European currency tried to recover after severe fall in Friday deals. Correction continued till 1.4209, where the growth was sustained by the resistance level. With the European session opening the dollar began rallying against majors, including the European currency. Only by the end of the deals the Euro tried to show a slight correctional growth, which is currently in the sideward channel. On total, the U.S. dollar rose by 35 points against the single currency.
The morning trading showed a slight growth attempt of the European currency. This was mostly due to Friday falling correction and also the France manufacturing production data, which demonstrated an increase of 0.3%, compared to the last period. The Sentix investors confidence, measuring the investors confidence in the Eurozone economy, is going out the negative zone steadily and was witnessed at -17, compared to the last period -26.
To my mind, the pressure on the European currency was put by absence of the U.S. microeconomic statistics on Monday and also the major players mood, who depend on the stock indexes more and more. Thus, on Monday the American stock indicators closed in the negative diapazon without significant adjustments. The indexes were lowering within the correction after the long term rising, following the raw companies shares.
Concerning the technical pattern. The morning advancement was sustained by correctional Fibo level 38.2%, which stood at 1.4209. Inability to overcome this range promted the other decrease testing the correctional Fibo level 50.0%.
Presently, the Bollinger bands demonstrate a low liquidity in the market, so I don\'t recommend to consider its bounds as dynamic support and resistance levels at 1-hour graph.
Most likely that today\'s trading day will show the sideward movement. About this signals the divergence, formed on the basis of MACD index. If you look closely, the indicator did not take this lowering too hard, as it was on Friday, describing a possible reversal motion to the European currency strengthening. Worth warning those who will open the long term positions, as lack of fundamental statistics and correctional stock market may lead the pair to another trading channel or continue its moderate down-going movement to accumulate forces for the next surge.
Pay attention to the U.S. fundamental data, which will be issued today prior to the American session outset. Probably, it will be able to «bring to life» the market, but it is almost impossible, as the major participants\' attention will be compeled to the statistics on August 12 and 13 with the trade balance report and the U.S. jobless claims figures.
Today I recommend to buy the pair at 1-hour timeframe closing above 1.4161 with the target – T/P 1.4215 and S/L 1.4123
Sell the pair at 1-hour timeframe closing below 1.4087 with the target – T/P 1.4004 and S/L 1.4141
Best regards,
Analyst: M.A.Magdalinin