Today, on April 23rd, the common European currency is still gaining value against the American currency. At this point, EURUSD is trading around 1,3845 after gaining 0,32%. The rally was initiated by positive economic reports testifying to economic growth in the manufacturing and service sectors of the eurozone in general and Germany in particular.
During today’s American trading session, we are about to see the preliminary report on the US manufacturing activity. The next key data for the market are the US new home sales in March.
Market Leader and Masterforex-V Academy have analyzed the situation and its influence on EURUSD.
As we have mentioned below, some macroeconomic stats for France, Germany and the entire eurozone were published earlier today. After Markit published its composite index, with a decline from 51,8 in March down to 50,5 in April, the common European currency declined from 1,3836 down to 1,3799, thereby dropping some 36 points down. As you can see, the index is going down and approaching the critical level of 50,0. A decline below it will indicate a more serious slowdown.
Still, after a similar index for Germany was published, we could see an increase from 54,3 in March up to 56,3 in April. This definitely helped the common European currency to play back a fare share of the previous decline. The price reached 1,3822 sine the data turned out to be better than expected.
The eurozone report was also a success. The index increased from 53,1 in March up to 54,0 in April. This index also turned out better than expected. After the report, EURUSD rallied 25 points more, thereby hitting 1,3847.
How do Masterforex-V Academy traders trade the news?
Masterforex-V Academy traders conduct daily analysis, which covers short/mid/long-term prospects. This is done in order to define the most likely scenarios and know how to react to them and trade them properly.
The following article covers the mid-term analysis of the H1 EURUSD chart. Within the scope of the mid-term and long-term trends of EURUSD, a retracement was started on April 11th from the local high. The retracement took place up until 1,3783 and was suspended on April 22nd. Therefore, the price created a move within the scope of an MF sloping channel (the red line).
Yesterday, EURUSD started a new rally supported by positive economic data from the eurozone, including the eurozone’s consumer confidence index, which indicated the highest level of confidence since October 2007.
As we have already mentioned above, today’s positive data from Germany and the eurozone backed further growth. As a result, the price broke above the top of the defensive MF sloping channel. Consequently, the currency pair went out of the consolidation range between 1,378 and 1,3830 (the green lines).
If the price manages to consolidate above1,3830, this will prompt a further rally. If this is the case, the price may well reach 1,3864 or even 1,3880.
Alternatively, if the American session shows us stronger manufacturing activity in the USA in March, EURUSD is likely to retrace back. If the price goes back into the consolidation range and then breaks below the MF sloping channel, it may well decline down to 1,3759 (the red arrow). The downward targets are marked with blue.
