During Friday’s trading session the dollar rose against the euro, as many investors are concerned about Europe’s debt crisis. Disappointing U.S. companies’ data provoked the additional demand for save-heaven USD. During trading session the dollar increased by 44 points against the euro. Market volatility was 65 points.

Fundamental Review:

According to the Federal Statistical Office of Germany, PPI rose 0.3% MoM during September and 0.7% YoY. Forecasts were expecting +0.3% and +1.6%, respectively.
The prices on energy increased by 0.4% in September MoM and 3.1% YoY. It is the main reason of PPI growth.
Core PPI rose 0.3% MoM and 1.1% YoY.
There was a decrease in the number of U.S. Existing Home Sales in September.
Existing Home Sales in the USA fell 1.7% MoM which is equal to 4.75 million annual rate. However, the sales rose 11% YoY, figures from the National Association of Realtors (NAR). The data was in line with the forecast.

Technical Analysis:

The correctional down move of the pair for the second consecutive day could not break the upward price channel which was formed at the beginning of the previous week. The trade is in the upward price channel at the moment; the lower border is placed in the range 1.2890, the low of October 15 to 1.3012, Friday’s low. The upper border of the channel is near 1.3139, month’s high.
The level of 1.3013 has prevented a considerable fall in the price of pair. It is the first and the most important resistance on a buyers’ way. If it is broken, then a more powerful downward move may resume; the bears could test a more serious level of 1.2985. The descending move may continue to the level of 1.2961.
The 20-day moving average points out the resistance between buyers and sellers. It is placed under the 60-day moving average. If we consider the down move as a correctional one, then today or at least tomorrow EUR/USD has to climb higher 60-day moving average, otherwise sellers may increase pressure on the pair.
The area of 1.3079 is the first level of resistance, here the growth may continue to the bottom of 31 figure; there the bulls may reach 1.3128. A test of the boarder 1.3160 is the most important target in a medium-term up trend.
Though, Bollinger Bands are pointed down they depict the low volatility which will be appropriate for the bulls. The trading is in the higher pattern of the channel and the moving average, placed at 1.3033, is a dynamical support level.
MACD indicator has almost recovered in terms of sales and is near the zero level; it explains uncertainty on the market in terms of further actions.

Today’s key resistance and support levels:

Suppost levels: 1.3013, 1.2985, and 1.2961
Resistance levels: 1.3079, 1.3101, and 1.3128
Moving Average 60-day (yellow line) - 1.3070
Moving Average 20-day (green line) - 1.3033