FX.co ★ Analytical review of the EUR/USD currency pair for 08.10.09 with the forecast for today (09.10.09).

On Thursday, amid general positive mood, the European currency continued to strengthen affording itself to fix a new week high at 1.4819 and test the 48 big figure. It is clear that such high psyhological level won\'t be broken through on the first try and prior to the repeated testing, most likely that we are to see a short break. With the Asian session opening EUR/USD pair showed a big increase. Mostly, it was due to the Asian stock indexes upturn. The trading channel 1.4751-14787, set up prior to release of the interest rate decision of the ECB after the rate announcement, was broken through upwards, then followed a sharp collapse amid the profit fixation by short term players and afterwards one more confident growth to the session highs. On the whole, the European currency rallied against the US dollar by 104 points. The trading volatility rate moved within wide range.

A moderate pair\'s falling in the first part of the European trading session was seen because of the French trade balance deficit uprise to -3.40В. The experts were forecasting a drop just to 2.50В. In its turn the German industrial production gladdened the market participants rising by 1.70% versus the last month decline of -1.10%. The experts were waiting for a tick up of 1.5%. Tracing the recovery graph of this indicator since March 2009 worth mentioning that the correctional lowering had rather good style, and further recovery to the July maximum at 3.3% may be witnessed in near time.

Of course, a decisive effect had the Eurozone interest rate publication which remained at the same level 1.0%. On the whole, nobody expected any significant changes. Concerns about its advancement were not realized.

A good push for the European currency rally turned out to be the US jobless claims report, which fell to a record low this year to 521.000. The last reading was at 554.000. The economists were also predicting a slump, but not so considerable and high paced. After this indicator issue, the pair surged sharply from 1.4721 to 1.4819, allowing the bulls to take the initiative. The wholesale reserves demonstrated the upward dynamics reviving from -1.6% to -1.3%.

The technical pattern. At present time all you can do is to suppose how will come to an end the falling of September 23, wait for the pair\'s restoration almost to zero level of correctional Fibo levels which stood at 1.4846. The pair has good potential for further rise to the range mentioned above, but it won\'t be so easy to break it through.

If the growth will be limited by these bounds then we will possibly see the formation of «head&shoulders» graph model, able to lead to the pair\'s reversal, if the final figure is accomplished.

MACD indicator enters the sales zone gradually, and with the first pair attempts to reach 1.4764 or even 1.4817, these range can be considered as good sale levels. Today\'s pace will be set up by the economic calendar full of various Eurozone data.

Support levels: 1.4705, 1.4676, 1.4620

Resistance levels: 1.4674, 1.4817, 1.4848

Today, I recommend to buy the pair at 1-hour timeframe closing above 1.4802 with the target – T/P 1.4854 and S/L 1.4761

Sell the pair at 1-hour timeframe closing below 1.4704 with the target – T/P 1.4649 and S/L 1.4742.

Best regards,

Analyst: M.A.Magdalinin