Last Friday macroeconomic data was strong; New York was hit by snowstorm, trading activity was low. China’s Trade balance in January was $29.2 bln against expectations for $24.3 bln. Germany’s Trade balance in December was up €2.2 bln. US Trade deficit narrowed $10.1 bln. US Corporate sector showed good results. US stock index S&P 500 has rallied 0.57%, the euro was in inverse correlation to the stock market and it dropped 33 points.
Last Saturday Annette Schavan, German education and research minister stepped down from the Cabinet to fight allegations that she plagiarized her doctoral thesis. Schavan was Angela Merkel’s powerful support in the party and the Cabinet. Amid Schavan’s resignation Merkel’s positions during elections for Bundestag, which will be held in autumn in the range with other ministers’ resignations Guttenberg Jung, Minister of Defense; Röttgen, Minister of Environment, and even German president Wulff, become weaker. There more and more forecasts that she will lose the elections. It has negative influence on the euro, but it is only from the psychological point of view. In practice Angela Merkel hindered the European integration and in the long term her resignation will strengthen the single currency.
There is no relevant news for today. At 11:45 GMT+4 Industrial Production in France is published, it is expected to drop 0.3% against 0.5% in the previous month. The Euro group is scheduled (meeting of the finance ministers of the eurozone), tomorrow the Economic and Financial Affairs Council (ECOFIN) gathers. At 22:00 GMT+4 Janet Yellen, Vice Chair of the Board of Governors of the Federal Reserve System speaks.
On the daily chart the price is on the Kruzenschtern line that in terms of convergence with Marlin oscillator on the H4 may provokes a technical rebound. When the resistance line on the H4 1.3405 is broken (high of January 14), 1.3434 target opens. Then we are waiting for a decline.