EUR/USD: The dollar decline has slowed in the foreign exchange market _08/06/2016

Trading recommendations

Sell ​​Stop 1.1320. Stop-Loss 1.1350. Targets 1.1285, 1.1270, 1.1210, 1.1180, 1.1100, 1.1060

Buy Stop 1.1410. Stop-Loss 1.1370. Targets 1.1430, 1.1485, 1.1500, 1.1535, 1.1600


Technical analysis

Indicators OsMA and Stochastic on the 4-hour, daily, weekly charts paint a contradictory picture. If the daily chart indicators are located on the side of buyers, the 4-hour and weekly charts, according to the testimony of indicators, the situation is more like a flat.

Disappointing NFP figure for May, released last Friday, collapse of the dollar across the currency market. The EUR / USD strengthened on Friday, more than 210 points, having played at the same time more than half the previous month's losses.

The EUR / USD broke through important resistance levels 1.1180 (EMA200, EMA144 in the afternoon, EMA50 on the weekly chart), 1.1285 (23.6% Fibonacci level of the correction to the last wave decline from 2014 highs of the year) and a decline has not yet been collected. Although the upward momentum gained by the NFP, seems to fade.

With the opening of the day the EUR / USD has strengthened slightly more than 15 points.

Break of 1.1430 resistance level will send the pair to levels of 1.1485, 1.1500, 1.1615 (highs of May and the year), with the prospect of growth to the levels of 1.1700, 1.1785 (38.2% Fibonacci level), 1.1900 (EMA144 on the weekly chart).

Break of the support level 1.1285 will create the conditions for reducing the support level 1.1180 and will increase the risks of returning to a downward trend (after the breakdown of support levels 1.1100 (May lows), 1.1060 (the lower bound of the new downward channel formed on the daily chart)).

However, more likely the pair EUR / USD before the Fed meeting on June 15 will be in the range between the levels of 1.1285, 1.1430.

Support levels: 1.1300, 1.1285, 1.1270, 1.1180, 1.1100, 1.1060

Resistance levels: 1.1400, 1.1430, 1.1485, 1.1535, 1.1615


Overview and Dynamics

Waiting for raising interest rates in the United States at the meeting of the Fed's June 15 strongly decreased after weak NFP May. However, the dollar's decline has slowed in the currency market. Even if the rate will not be raised in June, the market participants has reason to believe is possible to increase in July.

Although D.Yellen not made clear in the question of the further steps the Fed in terms of tightening in US monetary policy and the Fed confirmed its intention to use caution when raising interest rates, signals to minimize a program of gradual tightening in US monetary policy in a speech on Monday D.Yellen not It contained.

Disappointing data on NFP in May, it is certainly a negative factor. However, D.Yellen no accident in this saw.

Moreover, the unemployment rate decreased to 4.7% (forecast 4.9% and 5.0% in April), showing an approximation to full employment of the US population. Published yesterday, the inflation indicator (labor costs per unit of production), increased by 4.5% (vs. 4.0% and 4.1% in the previous quarter), and this has a positive effect on the growth of inflation in the US, aspires to Fed. The consumer price index in this case in April rose by 1.1% in annual terms. In a paper published in the "Beige Book" (in the regions of the US Federal Reserve report on economic conditions) last week pointed out that "in most regions experiencing a rise in labor markets." Wages and employment growth are called moderate.

In addition to the weak NFP the pair EUR / USD is supported by published yesterday revised positive data on euro area GDP in the first quarter (+ 0.6% and + 1.7% yoy), was better than expected.

Strong news drivers for the EUR / USD over the weekend also not expected. It is worth, perhaps, attention to data on German trade balance for April (published on Thursday 07:00 GMT) and the indices of consumer and wholesale prices in Germany in May (published Friday 07:00 GMT), which can cause volatility in the pair with the euro .