The pound bears are still strong | 19 May 2014

Euro

The Euro was short-termly oversold and its dynamics will depend on the U.S. macroeconomic statistics. There were published two leading indicators - the Housing Starts number and Michigan Institute consumer confidence. The quotations would fall below 36 figure after the positive data yield, otherwise we are waiting for a technical correction to the resistance level 1.3704.

The euro/dollar falling continued. The pair broke the support at 1.3689 and fell to 1.3648 support area. Than there was a bounce up to 1.3733 resistance which was quite logical, given the oversold signs and the important supports area, stretching up to 1.3618.

The support levels are 1.3680- 1.3700, and the resistance levels are 1.3740 - 1.3760.

MACD is in negative territory.

Trading recommendations

Theoretically, we recommend to open short positions from current levels, however, the euro invulnerability mindful, it is better to watch its ability to break through the resistance and consolidate above.

Pound

The GBP/USD was also under pressure, but its decline was not as deep as the euro’s one. It found the support at 1.6731, from which managed to recover to 1.6806. Any attempt to increase towards 1.6820 should be used to open short positions. As a result, the pound recovery on 4-hour chart came from the state transition, which makes it more comfortable selling at current levels.

The support levels are 1.6780 - 1.6800, and the resistance levels are 1.6860 - 1.6880.

MACD is in negative territory.

Trading recommendations

The growth and the ability to consolidate above 1.6842 force to review the trading strategy. At this stage, it is doubtful that in the fresh drivers absence pound will fall below the 67th figure.

Yen

The Japanese stock market reacted with a moderate growth on strong GDP report for the 2014 1st quarter. This means that investors have already laid in the prices good economic growth data and will not rush to open long positions. Against this background, we see the dollar/yen pair consolidation in the rate within the 101.30 -102.20 range. The stock markets correction can lead to decrease to 101st figure, but in this area it can moderate the demand, which will be restored to the 101.42 resistance level. In general, we can expect the side trend development during the day.

The support levels: 101.20- 101.40, and the resistance levels: 101.70- 101.90.

The MACD indicator is in neutral territory.

Trading recommendations

The further risks reduce remains the same, but the rise above 102.11 will weaken the "bearish" pressure.