FX.co ★ The analytical review of EUR/USD with the forecast for Monday, May 17

The European currency falling continued on Friday. Worth mentioning that there were no any objective causes for the pair lowering the, however, there were also no any suppositions for growth that increased negative mood of investors on the market.

At the Asian session the movement was in a sideward channel, but further Euro setback recovered. A slight correction was fixed by the North American deals opening, although it was directly related to the profit fixation.
By the end of the deals the Euro-dollar pair fell below 1,24 and reached the lowest level from October 2008. The trading closed at the session minimums around 1.2356. The volatility totaled to 222 points.

The fundamental review:

Due to lack of the serious fundamental statistics from the Eurozone the pair did not obtain any good support.
There can be pointed out the upturn of Italy’s consumer price index in April which came in line with the experts forecasts completely. According to the data the Italian inflation rose by 0,4% to 1,5% versus the analytical predictions which also gave the growth estimate +0.4% .
The harmonized consumer price index turned up in April by 0,9% to 1,6% annually and confirmed the expectations.
The positive statistics of the USA backed up the US dollar substantially.
Thus, the retails sales leveled up again in April. Applying to the US Commerce Department report the retail sales rose by 0,4% again the economic forecasts which promised less confident increase only by 0,1%. Excluding the automobile sector the retail sales also improved by 0,4%.
The industrial production of the USA also showed an uptrend rising in April by 0,8% versus the estimation of 0,7%.
The consumer sentiment index of the Michigan University ticked up in May but lower than forecasted. The data demonstrated that the index touched 73.3 versus the expected 73.5.
The production capacity use developed in April just to 70.8% against the forecast of 73.8%.

The technical analysis:

The pair expands its downside movement breaking through the 24 figure level and almost reaching the low of October 27, 2008 which stood at the border of 1.2326.
In case of this level outbreak the falling will be continued to the support range of September 22, 2005 - 1.2269, and then to 1.2171.
For the growth recovery it is needed to close above 1.2428 which is to open the gates to 1.2512 with further escalation to the 26 figure background.
The Bollinger bands are still down-directed and the dynamic resistance level is the middle band located near 1.2466.
MACD indicator is in the negative zone and any short term hike can cause a new sales wave.

Recommendations for today:
Support levels: 1.2326, 1.2269, 1.2171.
Resistance levels: 1.2428, 1.2512, 1.2602.

Today I recommend buying the pair at 1-hour timeframe closing above 1.2335 with the target – T/P 1.2453 and S/L 1.2287
Sell the pair at 1-hour timeframe closing below 1.2228 with the target – T/P 1.2146 and S/L 1.2280.