Current trend
Despite the lack of fundamental releases at the beginning of the week, situation is Europe is improving. It is safe to say that bank crisis in Spain has been avoided. One of the largest banks of the country “Bankia” which suffered difficulties has issued bonds with the yield of 3.5%. Demand for securities significantly exceeded the supply and low interest rate shows that the risk of bankruptcy is left behind. Many corporative institutes also started to issue bonds, the total amount of which rose by 50% in 2013.
Attention today shall be paid to the data on payment balance and index of business activity in Europe. Predictions for these indices are positive; therefore the pair EUR/USD can strengthen breaking down the upper limit of the trading channel.
Support and resistance
Because of lack of important macro-economic news Euro is traded in the narrow channel of 60 points. The nearest resistance level is the upper limit of the channel at 1.3580. Support level is the local lows of 1.3507.
Trading tips
It is recommended to open long positions after breakdown of the level of 1.3580 with stop-loss at 1.3560 and a target of 1.3670.
Dmitry Agurbash
Analysts of LiteForex Group of Companies
