The market still reacts poorly to a fundamental positive and pays much  attention to negative news over the USA.

After small correction on Wednesday, uptrend on the European currencies against dollar again renewed its upward movement.

Data on retail sales for April and week data on jobless claims caused dollar falling yesterday. Euro hit a level 1,2790 and came to a serious resistance level of 1,2865, a key level for euro will be a level 1,2970.

According to the report of the US Department of Commerce Retail Sales showed rather weak growth - 0,5 %, below the previous values - 0,6 %, it is much weaker than market’s expectations, experts expected growth up to 0,8 % in April.

Retail Sales Excluding Autos were also below expectations - 0,7 % against 0,9 % of expected values.

Sales in a greater degree are supported basically due to petroleum rise. Retail sales of petroleum rose 4,6 % whereas retail sales excluding petroleum grew only 0,1 % that has strengthened even more a negative background of this release.

Initial Claims according to the report of Department of Labor were down 1000 in comparison with the previous data - 325000, however it was worse than the market’s expectations, experts expected drop in claims to 315000.

4-week average of the seasonally-weighed jobless claims was up 2500 to 317250. It is the maximal growth since the middle of December.

The pound sterling hiked on a background of a negative concerning dollar after the publication of the NIESR report. The British economy showed growth of 0.6 % for three months for April, giving additional conditions for higher interest rates.

Growth of industrial production exceeded rates of growth in service sector for the first time since 1999 as accelerated rates of economic development stimulate export. Investors gamble on that the Bank of England will raise the rate up to 4.75 % to constrain inflation which according to forecasts will exceed a target level of 2 %.

Dollar-negative altitude is warmed up by expectations of the further US trade balance rise, the report on which is expected today.

The market expects trade balance growth up to $67 billion in April in comparison with March similar indicator of $65,71. The special attention will be given to data on trade balance with East-Asian countries, in particular with China and Japan the share of turnover with which makes more than thirds of all trade turnover of the USA.

Investment streams equal on volume, but opposite in a direction, directed to purchase of the US securities, are required to cover trade deficit. While demand for the American assets remains high, especially from the countries of the Pacific region. Therefore alongside with trade balance the market will pay much attention also to Net Foreign Purchases, the report on which is expected on Monday on May, 15th.

Recommendations.

If trade deficit data are negative negative moods concerning dollar will be kept, however it will not cause strong splashes in traders’ activity. However traders can react to a unexpected positive on these data. Therefore today if data on trade deficit data  are is better than the expectations and better than the previous values it is possible to open shortly on recoil. We shall remind of deficit data for March - $65.71, expectations for April - $67.0. If data are below $65,7 it is possible to open Short at a current euro and pound sterling rates, in 2 lots, 1 lot with the near purpose +40 points, 2 lot to place in make-out, at minimal profit.