16 May 2014, EUR/USD
The main event was the GDP euro area report in the 1st quarter 2014. The economic growth rate went into negative area in the 2012 and 2013 first quarter, and this time in the first three months of this year the negative trend may be interrupted. Nevertheless, internal and external environment do not drive to the strong data publication - unemployment is still decreasing and located at a high level, while net exports growing at a moderate rates.
After falling to 1.3689 euro / dollar is consolidating above this level which is quite logical, given some oversold on the 4 hour chart. Any recovery attempts are very weak and limited by 1.3730 resistance.
The support levels are 1.3660- 1.3680, and the resistance levels are 1.3740 - 1.3760.
MACD is in negative territory.
The "bears" can test the levels 1.3672 and 1.3643 in the short term. The 38th figure direction bounces should be used to open short positions.
As we can see - pound is having a negative influence on the UK economy. The monetary regulator kept unchanged the monetary-credit policy targets. Thus we recommend not to think about going back to 1.70 figure in the near future.
From the technical analysis we see the GBP/USD is short-term overbought and we can expect a technical bounce now. The GBP/USD pressure remains the same, but its growth attempts are limited by the 1.6787 resistance.
The support levels are 1.6700 - 1.6720, and the resistance levels are 1.6860 - 1.6880.
MACD is pointing down, indicating the current downtrend movement rates.
The 4 -hour chart showing oversold signs which theoretically could lead to some bounce up. However, increase attempts towards 1.6800-1.6820 can be used to open short position.
All factors point to good GDP data publication, which will contribute to the Japanese currency and 101.42 support level testing can be expected. We recommend paying attention to the United States April inflation data. The leading indicators show mixed trend - retail sales decreased to the level 0.1 %, with an increase in the producer price index up to 2.1 % year on year. In general, we can expect the data release on the median prognosis level that cannot support the U.S. dollar demand.
The support levels: 101.20- 101.40, and the resistance levels: 101.70- 101.90.
The MACD indicator is in neutral territory.
The "bear" inability to break below 101.60 could inspire the "bulls" for more active pair buying.