American statistics are continuing to disappoint investors and purchasers of the dollar. During the American session on Friday, low values for industrial production and consumer confidence had a negative effect on the rate of the dollar.
Industrial production in April was -0.3% (forecasted 0.1%, previous reassessed from -0.6% to -0.3%). Preliminary values for Michigan University’s US consumer confidence index for May stood at 88.6 (forecasted 96.0, previous 95.6).
The euro/dollar rate grew from 1.1323 to 1.1466. The growth stopped at 112 degrees. Today is Monday. On the first day of the week I always look at a movement against the previous Friday. The calendar is empty, so I don’t see anything interfering with a euro rollback to 67 degrees: 1.1385.
Today is important for the euro, since it has stopped underneath a significant resistance (see daily graph).
On Friday the euro/dollar rate was approaching the 1.1474 resistance. The eurobulls have stopped at the trend line which was developed at the closing price. Friday’s candle on the hourly looks like a V-shaped pattern. It would be possible to look at the pattern like a hanging one, only the body is more of a bullish pattern. There’s a weak signal for a reversal.
If the sellers aren’t able to return the rate to 1.1380, the euro’s growth will strengthen to 1.1525. At the euro’s current speed of recovery, the trend line passes through the 1.1538 level. To nudge buyers towards closing long positions, sellers need to close the day lower than 1.13. A quick stochastic is beginning to turn around, but the daily signal for selling the euro still hasn’t formed.
On the weekly, the upward correction continues. Due to the weak US data, the eurobulls have re-set the maximum at 1.1466. I’ve nothing to add to my Friday’s commentary.