The USD/JPY is recoverying after the fall | 21 October 2014

Euro

The real estate market releases with the US employment increase can reach the forecasted medians. Against this background, the US dollar will get little support. All the traders’ attention will be focused on the Fed governor’s speech. Now inflationary expectations are falling, Ms. Yellen will again insist on "the long term low interest rates."

The pair stopped the growth. The pair attempts faced tensions to rise above the resistance level of 1.2800-1.2820, so the euro failed to consolidate above this level.

The support levels are 1.2710 - 1.2730, and the resistance levels are 1.2800 - 1.2820.

MACD is in a positive territory.

Trading recommendations

The pair needs to break through the level of 1.2800-1.2820 to continue its growth, then bulls will test the resistance level of 1.2890-1.2910, this level breakthrough will open the way to the level of 1.2960-1.2980, where the bears’ activation is possible. In turn, the inability to overcome 1.2800-1.2820 and the loss of 1.2710-1.2730 will return the euro to a downward direction.

Pound

The 10-year bond yields recovered above the level of 2%, and against this background, the bears will take profits on the short positions. The traders will positively react to the UK and US bond yields reduction. The Federal Reserve chairman statement at the second half of the day can also encourage bulls to open long positions. The pair came under pressure after the Bank of England stated that the interest rate increase may occur later than it was expected.

The support levels are 1.6020 - 1.6040, and the resistance levels are 1.6130 - 1.6150.

MACD is in a positive territory.

Trading recommendations

The GBP/USD decrease is limited by the support level of 1.6020-1.6040.The loss of the next support level of 1.6000 will open the way to 1.5920-1.5940. The pound growth is exclusively corrective at this stage.

Yen

The side trend is possible within the pair USD/JPY as we observed the US and Japan bond yields spread extension that is a bullish factor. On the other hand, the traders’ attention is focused on the Jeanette Yelen’s speech. It is now difficult to expect positive comments from Jeanette Yelen about the US dollar due to the lower inflationary pressure. The stock markets are confidently recovering that supports the US dollar growth against the Japanese yen that rebounded from the support level of 105.60-105.80.

The support levels: 106.10-106.30, and the resistance levels: 106.70-106.90.

The MACD indicator is in a negative territory.

Trading recommendations

While the pair is trading below 106.70-106.90, the downside risks will be preserved. Its growth above this level will return bulls some optimism.