On Thursday, the US dollar grew against the euro amid data on US Initial Jobless Claims and Philadelphia Fed index.

Trading session closed in favour of the US dollar which strengthened against the euro 17 points, market volatility was 60 points.

Fundamental review:

Current Account surplus in the Eurozone narrowed in May. According to the ECB, surplus fell to 19.6 billion euros compared to revised upwardly April’s figure of 23.8 billion euros.

US Initial Jobless Claims from July 7 to July 13 dropped 24,000 and totaled 334,000. The economists forecast it to be 340,000.

Technical analysis:

Yesterday the pair was in sideways channel for the whole day and for some time it was below the very important level of support and it led to the pair had managed to for a small downward price channel. The lower boarder of this channel is in the area of low of July 17, 1.3082 and yesterday’s low, 1.3065. Meanwhile, the upper boarder is located in the area of the high of July 17, 1.3177 and today’s high, 1.3149.

The bulls have managed again to lead the pair to the important level of resistance in the area 1.3141. The break of it provides again an opportunity to rise to 1.3165 and then to test the level of 1.3193. If it happens, new target for long positions is the level of 1.3227.

Despite all these movements, moving averages are still parallel and almost at the same level, which confirms the sideways character of the market in the medium term.

If bears once again try to take the initiative, the first level of support will be the area of 1.3114, from it the pair may drop and bounce the relevant level of 1.3087, which as the result of yesterday’s trading session was difficult to cope with for the sellers. If the level of 1.3087 is broken, the drop continues towards 1.3045 and 1.3015.

Bollinger Bands points low market volatility which suggests there are no major investors on the market. Trading is conducted in the upper boarder of the channel, and the median line placed in the area 1.3105 serves as dynamic level of support.

MACD indicator is still near the zero point and the trading is still in the range 1.3087 to 1.3165. It is recommended to trade within this range.

Today’s key levels of support and resistance:

Level of support: 1.3114, 1.3087, and 1.3045

Level of resistance: 1.3141, 1.3165, and 1.3193

50-day Moving Average (yellow line) – 1.3116

30-day Moving Average (green line) –1.3105 

Maxim Magdalinin takes part in the Analyst of the Year award

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You may contact the author: maksim.magdalinin @ analytics.instaforex.com