Published on Friday data on US GDP was rather strong. It grew 2.5% annually in the first quarter vs. forecast for 3.1. However, it was said it was disappointing and even US consumer confidence index in April was 76.4 vs. forecast for 73.3 did not manage to influence the situation. Consequently, DJIA added just 0.08% and S&P 500 declined 0.2%. The euro rose 20 points. However, it was not the current figure that disappointed investors; on the contrary it was an expected rise for 1.8% in the second quarter.
Today pessimism may continue. At 15:30 GMT+4 data on US Personal Income and Spending in March is published. Personal income is expected to rise 0.4% vs. 1.1% in February, Personal spending rises 0.1% vs. 0.7% in the previous month. At 18:00 GMT+4 data on US Pending Home Sales in March is revealed, it is estimated 1.0% vs. 0.4% in February.
Probably the data on US GDP provided the last opportunity for the euro to grow. Now the ECB decision is published in three days and there are a few who are willing to buy the single currency. We expect the bearish trend will strengthen. There is the additional risk factor for the euro, Italian parliament has confidence vote today. Enrico Letta was sworn in as Italy’s prime minister after forging an alliance with Silvio Berlusconi, ending a two-month stalemate and signaling a generational shift in the country’s politics.
Technically, in order to continue growing the price has to overcome the resistance of trendline on the daily chart 1.3067. In this case the first target is resistance of Kruzenshtern trendline on the H4 1.3092, then resistance of 1.3115 channel.
If the price reverses under the trendline on the H4 (1.3032) the descending movement may be significant: the first target is 1.2950, then supports of the trendlines on 1.2920 (confluence of targets on the daily and H4 charts).