17 July 2014, EUR/USD
The weak ZEW institute release confirms negative trends in the euro area and we believe that the further euro reduction is not far.
The euro/dollar fell in accordance with a negative outlook bursting out a narrow range that had been formed in recent days. As a result the "bears" tested the 1.3520, approaching to the support level of 1.3500.
The support levels are 1.3460- 1.3480, and the resistance levels are 1.3535 - 1.3555.
MACD is in a negative territory.
The "bears" may test the support level of 1.3480 in the short term, which can activate the "bulls". However, the rebound towards of 1.3600/18 should be seen as an opportunity to open the short positions as rising above 1.3650 will force to review the trading strategy.
The British pound strengthening amid the rising inflationary pressures will be continued today. We expect the upward trend continuation, where the strong resistance level is at around 1.7240.
The macroeconomic statistics supported the pound growth. After the consumer price inflation data, which showed its acceleration, the pair rebounded from the support at 1.7070 and jumped to 1.7146, and soon to 1.7192. The speculators feel comfortable taking short-term long positions, resulting in the pair fall back to 1.7130.
The support levels are 1.7090 - 1.7110, and the resistance levels are 1.7170 - 1.7190.
MACD is in a neutral territory.
Recently published the UK labor market may affect the pair dynamics. The weak data may trigger a massive "bulls" profit taking with the pound subsequent decrease.
The tone is still negative in the market as the BoJ continues to protect conservative style in the prospects of monetary policy changes in the light of this the pair’s growth will be limited.
The dollar/yen support remains impregnable around 101.22 for the "bear". The pair returned to the previously punched level of 101.70 and tries to consolidate on it now. The growth efforts are limited by the resistance at 101.70. The "bulls" inabilities to break above lead to another dollar fall below the level of 101.59 and testing the support at 101.22.
The support levels: 101.20- 101.40, and the resistance levels: 101.70- 101.90.
The MACD indicator is in a positive territory.
That being the case we feel that the "bears" need to break this level and consolidate below to continue a downward correction. Otherwise we expect the consolidation followed by the uptrend resumption.