07 April 2014, EUR/USD
The Euro/dollar, which began to decline on last Thursday after Draghi`s promises to apply the non-standard measures to combat the growing deflation threat, continues to decrease.
The negative inflation trends in the euro area will support the “bears” in the short positions formation.
Until the ECB meeting and Mario Draghi’s press conference results the euro/dollar stood almost on the spot. As usual, during the press conference, Mario Draghi market volatility increased, and in the lights of this the pair jumped to 1.3807, then returned to its original position, from the beginning of the decline. As a result the support around 1.3720 has been tested and broken. Now this level acts as a resistance, which limits the recovery attempts.
The support levels: 1.3700-1.3630, and the resistance levels: 1.3740 -1.3800.
Theoretically, we should expect a further decline towards 1.3618, the growth to 1.3755 should be considered as a good chance to go short.
The Macroeconomic Research Center Markit Economics disappointed the investors last week - all the three PMIs: industrial, construction and service came worse than it was expected.
On a fairly weak statistics on the UK pound began a decline versus the U.S. dollar that lasted until the level 1.6567 was achieved. The pressure on the euro in a cross with the pound kept the pair from falling further, with limited resistance kickbacks at the 66th figure.
The support levels: 1.6550 - 1.6515, and the resistance levels: 1.6639 - 1.6600.
Daily chart gives mixed signals: MACD indicator indicates the growth.
The indicators show a downward movement to the level 1.6550. After its break the pair will go to 1.6480.
The market understands that the further Japanese currency devaluation is inevitable, and enthusiastically opened the short positions.
After the level 104.11 testing the dollar/yen retreated to 103.20, where it was able to find a support. Still some weak movements can be seen between the 104th mark and this level. The “bears” are trying to push the rate below through the support.
The support levels: 103.43 - 103.20, and the resistance levels: 103.60 – 103.63.
MACD indicator indicates a further decrease
In case of a success, the “bears” will be able to test the support at 103.60-103.20.
Theoretically, the decline towards 103.00 should be used to open the long positions with the expectation of the 104th mark breakdown.