08 October 2014, EUR/USD
The pair euro/dollar was trading in a lateral trend amid the lack of interesting macroeconomic releases. As it concerns the Federal Reserve protocol – we should not expect strong changes. The most FOMC members still take into account "the low interest rates long term." The inflation expectations are reduced and against this background it is difficult to expect the Fed rhetoric change. Both the German bond spreads and the American Treasuries have significantly declined.
The pair EUR/USD continues an upward correction and came to the resistance level of 1.2730. The support level of 1.2580 successfully holds back the bears’ efforts.
The support levels are 1.2640 - 1.2660, and the resistance levels are 1.2730 - 1.2750.
MACD is in a positive territory.
The single currency is trying to grow to the resistance level of 1.2730. The support level of 1.2660 loss will lead to the support level of 2580 test and its breakdown will return the euro to the 25th figure. The rise above the 27th figure will weaken the bearish impulse.
The pound is under moderate pressure. Investors are waiting for the new "triggers" that can lead to the sharp quote changes. The UK 10-year bond yields have installed a fresh yearly low, pointing out to the weak inflation expectations. In this regard, the Bank of England cannot rush to raise the interest rates which will put pressure on the British currency. The pair GBP/USD does not leave attempts to the upward correction continuation. The support level of 1.6040 successfully deals with the task that keeps the chances for another resistance test.
The support levels are 1.6020 - 1.6040, and the resistance levels are 1.6130 - 1.6150.
MACD is in a neutral territory.
The resistance level of 1.6130 breakthrough around will weaken the bearish impulse and will give bulls an opportunity to fight for the resistance above the level of 1.6200. The loss of support will result in the fall to the level of 1.5960.
We should not expect from the Fed report the "soft comments" concerning monetary policy which is a positive factor for the American stock market. The "cheap money" move stock indexes upward amid the strong direct correlation between the S & P500 and the Nikkei 225, on the one hand, and the pair dollar/yen correction, on the other we can expect that the bullish views will get more popular.
The US dollar fell to the level of 107.80 where it was sold off that allowed the US dollar to return above the level of 108.20 and test the mark of 108.70 which provides the strong resistance at this stage.
The support levels: 107.60-107.80, and the resistance levels: 108.20-108.40.
The MACD indicator is in a negative territory.
The US dollar is trying to consolidate above the level of 108.20. In this case, the resistance level of 108.70 breakthrough risks can rise and the dollar can again start to grow.