19 June 2014, EUR/USD
The ZEW institute report on business climate in Germany in June confirms the negative trends in the euro area and indicates that we will soon see the euro/dollar sell-off again. In the first half of the day amid the lack of important macroeconomic publication we can expect the side trend development.
The volatility in the market is mainly located on the lower level - consolidation phase is coming after several days of the prolonged movements. The euro/dollar stuck in a narrow range again for the several consecutive days trading between 1.3512 and 1.3587 levels.
The support levels are 1.3535- 1.3560, and the resistance levels are 1.3590- 1.3600.
MACD is in negative territory. The histogram is growing.
The situation is the same - the 1.3480 downside risks are pretty high still we do not exclude the recovery towards 1.3650, which should be used to open the short positions.
Starting from July 2013 the UK formed a steady inflation downtrend. According to the latest report, the CPI annual rate 1.5% is the lowest level since October 2009. This turn of events has confused the entire Bank of England cards guide, which announced a possible monetary - credit policy earlier tightening last week.
After the FOMC meeting outcome announcement we can expect the short positions strengthening.
The support levels are 1.6900 - 1.6920, and the resistance levels are 1.6960 - 1.6975.
MACD histogram started a decrease showing low volatility.
Trading recommendations The breakthrough will lead to the resistance 1.7042 testing. But there are no so much chances that the movement will be continued. The support loss will lead to the decrease to 1.6900, 1.6830.
In the first half of the day amid a lack of interest reports publication we should expect the side trend development. The main newsmaker will be rightfully performed by the Fed. Published the other day inflation report indicates that there is no need for the QE-3 exiting now and for this background, we can expect the U.S. currency demand. However, we can’t count on the strong pair growth - the 103 level will be quite hard to take for the "bulls" now.
The support levels: 101.70-101.80, and the resistance levels: 102.00 – 102.10.
The MACD is below the zero line and is growing.
The U.S. dollar against the Japanese yen was able to push off from the support 101.90 and overcome the resistance in the 102nd figure. The pair broke 102.20 on the Asian session. Thus, there are signs of improvement in the dollar / yen picture, but the "bulls" still have to compete for resistance 102.80-103.00. Its breakout can put an end to the downward correction.