04 April 2014, EUR/USD
Today is that long-awaited day for traders. The ECB decision on interest rates will be published today. According to a preliminary data the inflation declined in March to 0.5 % on an annualized basis in the euro area. Some global investment community representatives expect from the European regulator decisive measures to fight the deflation disease - the deposits for commercial banks negative interest rates establishment or the new incentive measures.
The support level is 1.3630-1.3600 and the resistance level is 1.3740 -1.3833.
MACD indictor is showing a decrease.
We expect the pair to fall to 1.3630.
The service sector PMI was published by the Macroeconomic Research Center Markit Economics. The weak business activity in a manufacturing and the construction sector does not allow us to expect a strong release on the service sector. We can expect a median forecast release with slight variations that will not cause a strong reaction on the market. EUR/GBP reducing amid the ECB President’s negative comments shall support the demand for the British currency versus U.S. dollar in the second half of the day.
The support level is 1.6567 - 1.6550 and the resistance level is 1.663900 - 1.6639. MACD is decreasing showing a sell signal.
If the pair comes out of the price range - it will show its direction in the short term. The support loss will lead to a fall to 1.6545-1.6500, the break of the resistance will lead to a growth to 1.6740-1.6780.
In the absence of interesting reports investors will focus their attention on the U.S. macroeconomic statistics.
After the winter recession – the USA show a moderate recovery in an economic growth, but it is also necessary to take into account seasonal factors - ISM usually does not show good results in March. In the light of this we can expect the release of data slightly worse than the median forecast which will limit the growth of the pair.
The support levels are 103.60 - 103.40 and the resistance levels are 103.75 - 104.00.
MACD shows that the pair is overbought.
The bulls lost their strength to push the pair further. We believe USD/JPY will show a short correction in a median term. The first correction target is 103.60, then 103.20 goes.