In general, there is no doubt that the single European currency was completely in the power of speculators. It continued to grow actively yesterday, although from a fundamental point of view, there was no reason for it to do so. And rather, on the contrary, an active decline should have been observed. After all, the fact that the unemployment rate in Europe has remained unchanged is only a small statistical focus. In fact, it rose from 8.1% to 8.3%. The thing is that the previous data has been revised upwards, so we are talking about an increase in unemployment. And this is despite the fact that unemployment is actively declining in the United States. Thus, the growth of the single European currency may be due to an exclusively speculative component. But this tells us that it will inevitably return to the values from which this growth began. It's just a matter of time.
Unemployment rate (Europe):
Nevertheless, the single European currency may even strengthen its position a little more during the European session. Since we are talking about the speculative factor, its main component is emotions. So, today, speculators will get another portion of positive emotions in relation to the single European currency. The preliminary assessment of business activity indices has already shown an increase in the index in the service sector from 45.7 points to 48.8 points, and the composite index from 48.8 points to 52.5 points. The final data is likely to remind everyone of this growth once again. Moreover, there is a chance that the data will be slightly better. At least, this is exactly what happened with the index of business activity in the manufacturing sector. However, this data does not change the essence of what is happening. The market has already taken them into account during the publication of preliminary estimates. Ergo, even if we see growth, it will also be purely speculative. Most likely, it will be short-lived, after which the single European currency will go into a sideways movement. The beginning of the reverse movement may well happen closer to the close of the US session.
Composite PMI (Europe):
The EUR/USD currency pair again showed speculative interest during the last trading day, which led to a breakdown of the upper limit of the local range of 1.1800/1.1820. The inertial upward move had a scale of 70 points, where the beginning of price changes was the American trading session.
The market dynamics has signals of acceleration, where the average daily level has been repeatedly broken by speculators.
If we proceed from the current position of the quote, then another stagnation is seen, where the narrow range of 1.1865/1.1877 serves as the boundaries of savings.
Considering the trading chart in general terms, the daily period, it is worth highlighting that, taking into account the recent upward impulses, the quote returned to the levels on March 23. But this is still not enough to break the corrective move from the peak of the medium-term trend.
In this situation, it can be assumed that the given amplitude within 1.1865/1.1877 will have a short-term character, and soon we will see speculative interest in the market again. The most suitable strategy will be the breakout method of one or another border (1.1865 / 1.1877), working on the outgoing impulse.
From the point of view of a complex indicator analysis, we see that the indicators of technical instruments on the minute and hour intervals signal a purchase due to the inertial upward movement. In turn, the day period has a neutral signal.