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The pound bulls may lose the optimism

31 July 2014, EUR/USD


The pound bulls may lose the optimism

With the U.S. trading session opening we will get the Germany inflation preliminary data, the bond market sentiment suggests not to wait any positive surprises. Soon investors' attention will be focused on the U.S. GDP data for the second quarter.

The euro/dollar decrease was continued. The pair has broken the support at 1.3420 and stays very close to the 35th figure. Obviously, the downtrend is in its active phase and the euro/dollar may fall to the support at 1.3330 in the medium term.

The support levels are 1.3355- 1.3375, and the resistance levels are 1.3420 - 1.3440.

MACD is in a negative territory.

Trading recommendations

The euro shows the oversold signs so we can expect the "bulls" attempts to develop an upward correction. The recovery up to 1.3535 will not carry the downward trend threat still the rising above it may weaken the downward pressure.


The pound bulls may lose the optimism

UK won't please the traders with interesting macroeconomic reports and all the foreign exchange market attention will be focused on the States.

It should be noted that 4-week average of primary and secondary initial jobless claims in July shows a confident positive dynamics that allows calculating the output data slightly better than forecasted medians.

The GBP/USD downward correction remains in force. It continued to decline, falling to the support area of 1.6900. The pressure on the pound still persists, as its attempts to restore are limited by the level of 1.6955.

The support levels are 1.6880 - 1.6900, and the resistance levels are 1.6980 - 1.7000.

MACD is in a negative territory.

Trading recommendations

The drop below 69th figure worsens the pair’s prospects and opens the way to 1.6785. The pound must return above 1.6980 for weakening the downward pressure.


The pound bulls may lose the optimism

Despite the pair quotations growth - it is quite dangerous to open the long positions now. The Japanese stock market looks shortly overbought that combined with the optimism lack on the U.S. stock market may start a technical correction. In this regard, the "Long" closing process on the pair can start at any time and we will see the quotations return to 101.70.

The support levels: 102.50- 102.70, and the resistance levels: 103.00- 103.20.

The MACD indicator is in a positive territory.

Trading recommendations

Despite the improved outlook, the dollar still needs to break and consolidate above 103.00 and only then we can say the downtrend is over.

Ruban Sergey
Analyst of «FreshForex» company
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