On Tuesday in the second half of the trading session, EUR / USD strengthened the decline amid the massive growth of the US currency, and the growth is quite curious. The weakening of the European currency began yesterday at the American session, when the pair marked the highs around 1.20 and sharply moved to a decline, leaving a long shadow –clear bearish signal. Of course, we saw the recent strengthening of the euro as a local growth, but we were hoping at least to see testing of the level of 1.2090 after such a signal of a week close and a reversal signal (hammer reversal candle pattern).
Well, the market fell to the level of 1.1820 and this level is again in the game. We already wrote that this mark - a very strong level of support, here goes the level of FIBO 38.2 from the last large-scale growth 1.05-1.25. If the bulls intend to keep the defense, then the best level is hard to find.
As for today statistical data, retail sales - the indicator of Americans spending increased by 0.3% in seasonally adjusted terms in April, compared with the previous month, US Department of Commerce said on Tuesday. Economists surveyed previously expected growth of 0.3%. So the strengthening of the dollar cannot be explained by published statistics. It is characteristic that yesterday and today the yield of US bonds is growing, today the yield of American 10-year bonds is at the highs of 2011. Good figures were provided by the Empire Manufacturing index, the figure reached the mark of 20.1 with expectations of 15 points. Well, let us be frank, this is a second-order indicator that can not move the market in such a large scale.
Let's watch how the markets act near this level of support 1.1820.The market can show a strong rebound, or can move into entirely new range below 1.1820. The opportunity for rebound is still very significant as well as the opportunity to open long positions.
Trading recommendations- out the market and watch 1.1820 level