The UK inflation lowered in August | 17 September 2014

Euro

The trader's attention is focused on the Germany business climate release from the ZEW institute. This indicator has been declining for 8 consecutive months and now there are no preconditions to change the negative trend.

The external and the internal conditions point to the next business optimism reduction: the inflationary pressure compression and the consumer confidence decrease, and with the economic sanctions package implementation against the Russian Federation they don’t allow us to expect the positive release.

The pair continues to consolidate after falling to 1.2860, trading in a range is limited by the support at 1.2890 and resistance at 1.2960. The euro could not rise above 1.2951 as growth efforts continue to attract the sale interest. The pair still needs to be corrected above, but there is no driver to do it.

The support levels are 1.2870- 1.2890, and the resistance levels are 1.2960 - 1.2980.

MACD is in a neutral territory.

Trading recommendations

The main scenario remains to update the minimum. But we don’t exclude the alternative attempt to develop the next growth for the level of 1.3030 break with the growth correction continuation.

Pound

We don’t expect the large GBP/USD fluctuations before the UK August CPI release. The economists surveyed by Bloomberg expect the index increase by 0.4%. The bond market indicates the bearish sentiment, the 10-year-old American T-Note yield bypassed the British Gilts last week firstly for the long time. The pound/dollar was traded between the resistance level of 1.6300 and the support level of 1.6200. The pound was unable to continue the recovery, the inability to break above the current highs led to the short-term players profit-taking.

The support levels are 1.6180 - 1.6200, and the resistance levels are 1.6300 - 1.6320.

MACD is in a neutral territory.

Trading recommendations

The possible Scotland separation from the UK will put pressure on the pair in the next few days. We expect a fall to 1.6200 and 1.6130.

Yen

The USD/JPY was traded in the fairly quiet line earlier this week and the main reason was the celebration of the Day of Respect for the Aged in Japan. The activity increase was recorded when the quotes fell and then safely returned to the original positions. The trading activity growth was amid the world's largest economy statistics release. The September business activity index rose to 27.54 points against 14.7 in the previous month. The dollar is still unable to overcome the resistance level of 107.20. In turn, the decrease attempts were limited by the 107th figure area support, where the demand for the dollar is still preserved.

The support levels: 107.00-107.20, and the resistance levels: 107.80- 108.00.

The MACD indicator is in a positive territory.

Trading recommendations

The inability to break the resistance and continue its growth increases the likelihood dollar drop down to 107th figure. In this case, the first bears target will be the support level of 106.10-106.30.