01, March 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

Bond auction strong results in Italy and the Central Bank bond auction eased investors' suspicions about the debt crisis in Europe.

Though the euro rose on Thursday having received a support from economic data, yesterday it fell. Anyway macro economic news give some confidence to the eurozone, as well as an auction on Italian government bonds investments, which has been successful, despite the political deadlock.

According to the report of the European Commission, the index of economic sentiment rose to 91.1 from 89.5 in February, it is its highest level since May 2012.

The bond auction in Italy improved the traders' mood as well. The auction was the first test of investors' risk appetite after the collapse of the financial markets on Monday, when we received the dubious results of the elections.

Unemployment in Germany is expected to remain unchanged in February after rising 16K a month earlier, and the slowdown in job growth could adversely affect the EUR/USD, as it slows the economic forecast for the euro zone.

If we take into consideration that the relative strength index is not oversold anymore and EUR/USD rebounded from 1.3017 support level, we believe that the pair may go to 1.3250, as this may reduce the possibility of the ECB rate cut. However, no report on the labor market can cause regular sales EUR/USD, and we can see a pair in the struggle to hold above the 1.3000 level as the region faces a deep recession.

If unemployment is going to narrow in comparison to the previous month, we can see a bullish candle after a five-minute news, to enter into a long position. Stop-loss is place at a reasonable distance from the entrance, which then we will move with the price growth in order to preserve our profits.