[IFX Tatyana]

On Tuesday, the Single European currency turned out to be in high turbulence zone as already in the first part of the day the investors had started selling the euro, but on the North-American session, the pair jumped sharply upwards, having increased from an annual minimum of 1.2111 and having reached a high at 1.2349.

The trades closed in favor of the US dollar, which strengthened by 97 points against the euro. The trading volatility amounted to 240 points.

Fundamental analysis:
The sovereign debt crisis of the Eurozone, which can do harm to the global economy recovery, and the growth of unemployment rate in the Eurozone have exerted strong pressure on the European currency.

The Eurozone unemployment rate rose to the highest level almost in 12 years again in April. According to Eurostat, the unemployment rate surged to 10.1% versus 10.0% in March, while economists were expecting the unemployment to remain at the level of 10.0%.

The number of unemployed persons gained by 25 000 to 15.9 mln.

The labor market of Germany continues gradual recovering. As the Federal labor office said, the number of unemployment persons declined by 45 000 in May, while in April this reading dropped by 67 000. The seasonally adjusted unemployment rate was 7.7% in May following 7.8% in April.

The expert predictions were the decrease of 17 500 unemployed persons and unemployment rate to remain unchanged.

The euro got a slight support after the statement of the European Commission Chief José Manuel Barroso, who said on Tuesday that he has no doubts regarding the euro future. “We have no doubts in the future of the euro. The euro is one of the most steady currencies in the world”, - declared Barroso during an interview at the summit Russia–EU in Rostov-on-Don.

“The European leaders firmly announced about their intention to do the best to provide the euro stability and it was really reached”, - added the European Commission Chief.

Despite the rising worries about the Eurozone debt crisis, the US economy recovers further after recession and Yesterday’s reports confirm that.

The construction spending in the USA increased in April and the commercial property market showed a growth. According to the US Commerce department Tuesday’s reports, the seasonally adjusted construction expenses moved up by 2.7% to $869.09 bln. per year in April, while economists were expecting the spending to remain unchanged.

Manufacturing ISM declined to 59.7 points in May after 60.4 in April, however, it turned out to be higher than expert forecasts.

The employment index rose to 59.8 points in May following the reading of 58.5 in April and new orders index left unchanged at the mark of 55.7 points.

Technical analysis:
A sharp plummet of the European currency to a 4-year low at 1.2111 provoked technical correction of the pair yesterday afternoon. Now, the trading is held in a wide diapason of the rising price channel, which has started from the yesterday’s low and the upper limit lies at 1.2350 area.

The pair is also trading at 1.2251 area, where the 50 day exponential moving average is placed, which restrain its growth.

For renewal of more steady uprising movement, the euro needs to close above the bottom of the 23rd figure, from which the growth can last to the yesterday’s high and then reach the level of 1.2390.

In case of the drop below the level of 1.2181, the way to the yesterday’s low will be open for the pair and to the low of 1.2060 from 12 April 2006 after.

Bollinger bands after yesterday’s peak movement point out very high liquidity on the market, however, the bands are parallel that speaks for that the pair is on a short pause ahead a new aggressive spike. The trading is driven in the lower part of the channel and the mid-band, placed at 1.2233, is a dynamic resistance.

MACD did not managed to leave the purchase zone, which indicated the pair tending to continue its fall.



Today’s recommendations:
Support levels: 1.2181, 1.2110, 1.2060.
Resistance levels: 1.2261, 1.2312, 1.2350.

Today it is advisable to buy the pair at 1-hour timeframe closing above the level of 1.2263 with a target - T/P 1.2338 and S/L 1.2219.
It is possible to sell at the closing of 1-hour timeframe below 1.2183 with a target – T/P 1.2107 and S/L 1.2225.

More analysis - at instaforex.com

[MadMarketScientist]

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[IFX Tatyana]

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Originally Posted by IFX Tatyana »

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[IFX Tatyana]

The US stock indices fell on Wednesday after the worries about the global economic growth had refreshed. Dow Jones Industrial Average index dropped by 40.73 points, or by 0.41%, to 9899.25. Nasdaq Composite index lost 11.72 points, or 0.54%, and totaled to 2158.85. it is the lowest closing level since February 10. Standard & Poor's 500 index declined by 6.31 points, or by 0.59%, to 1055.69.
The financial companies’ shares were the weakest on Wednesday. Bank of America shares moved down by 32 cents, or by 2.1%, to $15.01, J.P. Morgan Chase decreased by 66 cents, or by 1.8%, to $37.12. Exxon Mobil shares showed one of the most significant plummets, having plunged by $1.21, or by 2%, to 60.03.
On Wednesday, Dow Jones Industrial Average index was in the positive area for the most part of the session, but in the last hour, it traded lower after Chancellor of Germany Angela Merkel had spoken for the package of tight economizing measures in the amount of 80 bln. euro for the next four years. Merkel said time to level off stimulus and learn a lesson from the debt crisis has come.
On Wednesday, the investors become more optimistic about the world economy due to non-confirmed reports of Reuters that the Chinese export rose by almost 50% in May and also because of the US FRS President Ben Bernanke forecast of economic growth in this and next years.



More analysis - at instaforex.com

[IFX Tatyana]

Support levels: 1.0226, 1.0103, 1.0015.
Resistance levels: 1.0391, 1.0454, 1.0681.

An intraday view on USD/CAD continues to be bearish as long as the resistance level of 1.0391 is not broken.
Earlier, the pair has broken the support level of 1.0251 that aimed USD/CAD at 1.0103. Besides it, the previous breach of the support level of 1.0339 and the rising line of the trend means that the pullback from 0.9930 is finished at the mark of 1.0858. The breakthrough of 1.0103 will lead to another test of 0.9930.
However, the breakout of the resistance level of 1.0454 will make the market sentiment neutral. Further, the breach of 1.0681 will mean that the rollback from 1.0858 is finished.
In mid-term outlook, a fall from 1.0858 casts a shadow of doubt on bullish view of the pair. But considering bullish divergence of daily and weekly MACD, the reversal of the downtrend from 1.3063 should be expected soon. In this case, USD/CAD will move upwards to Fibonacci correction level of 38.2 from 1.3063 to 0.9929 on 1.1126 with the next target at Fibonacci correction level of 61.8 to 1.1866.


More analysis - at instaforex.com

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