Results of the last trading day:
On Tuesday the single currency was weakened to the American dollar to a nine-week minimum after a release of ambiguous data of ZEW and the quarterly inflationary report of Bank of England. On these news the cross rate of euro/pound has failed on 130 points, euro/dollar – on 80 points, to 1,1132.
At the American session euro exchange rate decreased to dollar already against the published favorable data from the USA which have increased probability that FRS will raise interest rates in June. According to the latest data CME Group FedWatch, probability of increase of a rate in June has grown from 26% to 38%.
Sales of new houses in the USA in April have grown by 16,6%, to the level of 619 thousand. Increase by 2,0% was expected. The previous value has been reconsidered from-1,5 to-1,3%.
Expectations of the market for today:
Key event of the environment is the meeting of Bank of Canada. It is expected that the Bank of Canada will leave an interest rate at the level of 0,50%. After a meeting focus of attention of traders will be displaced on Friday speech of the chairman of U.S. Fed J. Yellen.
Late at night there was a report of the American oil institute (API). For the last week reserves of oil of the USA have decreased by-5,137 million barrels (the forecast was-3,3 million, the previous value of-1,14 million).
Despite rally of dollar to many currencies, Brent barrel on Tuesday has risen in price at the American session from $47,78 to $49,22. Growth of oil quotations in Asia has urged on euro to strengthening.
The purpose on the day period – 1,1080. She is about the 135th degree from a maximum 1,1242. Nevertheless, on Wednesday I consider restoration of euro to dollar to the trend line – 1,1185. The explanation is simple. The rate of euro/dollar has fallen to 1,1132 because of sharp falling of cross-country of euro/pound. The unidirectional couples have dispersed in different directions. As the British pound became responsible for a divergence, it is worth expecting the synchronous movement towards the yesterday's movement pound/dollar as it was observed during the period from 12:04 till 03.05.16.
Considering that cross-country of euro/pound is corrected, that strengthening of the British to dollar will be slowed down, and euro – will accelerate. It is worth expecting a rebound from the trend line. If kickback is sharp, then in this case it is necessary to be extremely attentive since fast strengthening of euro will become a signal to the deep ascending correction. If activity of buyers remains low, then it is possible not to be afraid of breakdown of resistance 1,1185.
News of the present day:
- in Switzerland there will be a consumption indicator from UBS for April.
- in the Eurozone there will be an index of consumer climate from Gfk for May.
- Germany will publish an index of business climate from Ifo for May.
- The USA – a price index on housing for March.
- The USA – a preliminary index of business activity in sector of services for May.
- decision of Bank of Canada on an interest rate.
- The USA – reserves of oil and oil products in a week on May 15-21.
Technical analysis:
Intra day forecast: at least – 1,1134, at most – 1,1185, closing – 1,1161.
Against the growing oil quotations pressure upon EUR/USD has fallen down. Euro exchange rate in Asia was restored to 1,1157. As I have already told above, a main objective for euro – 1,1080. The zone 1,1110 – 1,1084 is turning on Gunn's levels. On May 19 from a zone 112 – 135 гр. I have begun three-day flat. The similar situation can repeat.
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