Thursday moves were quite expected. Mario Draghi evoked investors’ interest in the dollar (to increase the euro competitiveness), whereas investors almost tested our target at 1.2870. Thus, Draghi promised to save the minimum refi rate at the same level for at least a year and to introduce negative deposit rates. Moreover, he underscored that there are downside economic risks and but did not say a word about growing European economic crisis (which turns to the debt crisis now). Of course, investors could only sell the assets.
Today, the U.S. report on ADP non-farm payrolls for June will be the main event (16:30 GMT+4). Economists expect the indicator to hit 163-165K against 175K in May. However, in our yesterday’s forecast we mentioned that the reading could be better than expected. The unemployment rate is forecasted at 7.5% against 7.6% in May. However, German factory orders will also have a great significance. The indicator is due at 14:00 ПЬЕ+4б forecast +1.2% against -2.3% in April. A modest upward correction is expected amid this news, but later the quotes may go down at the U.S. session’s opening.
Technically, the correction is possible to 1.2918 (trend line resistance on H4 time frame). Further, the lower target is at 1.2868 – trend line support on H4. In case of its breakthrough, the price can slip to the area of strong technical support on daily chart at 1.2819/40. In case this target is tested, the quotes can go down to the red and blue lines support on the daily chart at 1.2714/43 which is equal to the highs registered in June 2012.