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Absolutely everything that happened yesterday was in favor of the euro's growth. Not only did European data turn out to be significantly better than forecasts, but US reports were actually worse than forecasts. Sometimes it happens. So there is nothing surprising about the euro's rapid growth.
It all started with the final data on business activity indices. If the preliminary assessment showed a decrease in the business activity index in the service sector from 50.5 to 47.6, then in fact it only decreased to 48.0. The composite PMI fell from 51.9 to 50.4, although it should have dropped to 50.1. Of course, we are still talking about declining indices. But after preliminary estimates were released, investors were already preparing for a slightly larger decline in the value of the single currency. So the final data led to a slight revaluation, moreover, in favor of the euro. Data on retail sales, which showed that a decline of -0.1% was replaced by an increase of 3.7%, also provided support to the euro. The point here is not only did it transition from recession to growth, but this very growth is so significant that it compensates for the deflation, which has been ongoing for the second month now.
Retail Sales (Europe):
If in Europe the final data on PMIs turned out to be better than preliminary estimates, the picture is completely opposite in the United States. The index of business activity in the service sector was the only report that fully coincided with the forecasts, which decreased from 55.0 to 54.6. The composite business activity index, which was supposed to decline from 54.6 to 54.4, in fact fell to 54.3. So the dollar's weakening throughout the day is quite logical.
Composite PMI (United States):
Today the dollar has an opportunity to win back at least part of yesterday's losses. Data on open vacancies in the United States should provide help, the total number of which may increase from 6,618,000 to 6,685,000. Given the fairly good content of the United States Department of Labor report, this inspires confidence that the labor market will continue to recover, which is an extremely positive factor.
Job Openings (United States):
The euro/dollar pair managed to be active yesterday after variable price fluctuations within 1.1700/1.1770. In fact, there was a process of accumulation, where, as a result, there was a shift in trade forces and, as a result, a breakout of the upper border.
If we proceed from the quote's current location, we can see the process of a slowdown, where the resistance level is 1.1800, and the highest range is 25 points.
An acceleration is recorded relative to the market dynamics, which is due to a two-day period of stagnation in the market.
Looking at the trading chart in general terms (daily period), you can see the price returning to the boundaries of the previously passed flat of 1.1700/1.1900.
We can assume a temporary price fluctuation in the range of 1.1770/1.1800, where the quote must settle below 1.1770 to resume short positions. We can consider an alternative scenario if the price is within the 1.1800 mark, where a fix higher than 1.1810 will indicate a subsequent upward movement towards 1.1850.
From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments unanimously indicate a buy signal by price taking within the 1.1800 mark.
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