Analytical Review of the Currency Pair EUR/USD as of 30.05.2016

Analytical Review of the Currency Pair EUR/USD as of 30.05.2016

30 May 2016, 20:34
Roberto Jacobs
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Analytical Review of the Currency Pair EUR/USD as of 30.05.2016

Technical data of the currency pair:

Previous closing: 1.1115;
Daily range: 1.1098-1.1117;
Opening: 1.1113;
52 - week range: 1.0538-1.1713;
Annual revenue: +1.05%;
Change in % for the previous day: -0.71.

Analytical review:

  • Last 2 weeks the Euro has dropped by over 200 points against the USD. During Friday’s session the increasing of the USD continued. The currency pair EUR|USD fell by 0.71% from Friday;
  • Yesterday, important statistics was released in USA. According the data issued U.S. Bureau of Economic Analysis (BEA), the Gross Domestic Product in 1st quarter of the fiscal year 2016 has grown by 0.8% in comparison with previous result at a level of 0.5%. However, the rate has not met market expectations of 0.9%;
  • On Friday’s press conference the Chair of the Board of Governors of the Federal Reserve System Janet Yellen signaled the probability of an early increase in interest rates if the economy and the labor market in the US continue to strengthen;
  • Commitments of Traders» records show the mixed picture. Major speculators has increased the long position by 12234 contracts. Also the short position has been increased by 1499 contracts;
  • News of this week will include the index customer price in euro area (Thursday) and ISM business activity index in the US manufacturing sector GDP (Wednesday). This data can affect market volatility and movement direction in the pair.


Summary:

  • Optimistic US economic statistics, the possibility of increasing the FRS interest rates in US in nearest future and increased volatility in the financial markets put strong pressure on the currency pair dynamic;
  • According to “СОТ” large investors do not have common opinion about the Euro;
  • Therefore, it is likely that the Euro will decline against the USD. It is recommended to open short positions.


Trading tips for the currency pair EUR/USD

Key levels:
Support levels: 1.1060
Resistance levels: 1.1135, 1.1190

Medium-term trading, Н4
At the moment the currency has broken out and consolidated below the local support level of 1.11350. By holding and testing have "mirror" the resistance level and in case of the respective confirmation (such as Price Action pattern), we recommend to open short positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly above the signal line. Take profit can be placed in parts at the levels of 1.1070, 1.1010 and 1.0950 with the use of trailing stops.

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Medium-term trading, Н4

Short-term trading, М15
At the moment the currency is traded in the range of 1.1100-1.1125. It is advisable to enter the market after breaking out and testing of this zone. Positions shall be opened towards the signal line and the nearest support/resistance level. Risk per trade is not more than 3% of capital. Stop order can be placed slightly above/below the signal line. Take profit can be placed in parts of 50%, 30% and 20% with the use of trailing stops.

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Short-term trading, М15


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