The EUR/USD shall keep growing in a long term | 20 October 2014

Euro

The United States will publish the September inflation report on Wednesday October 22 that will attract the Forex traders’ attention amid the bond market increased volatility. We expect a side trend during the day amid the lack of macroeconomic releases. The pair euro/dollar has failed to resume its growth by the end of the previous trading week. The euro tries to break through above the resistance and consolidate near 1.2800-1.2820. In contrast, the euro demand is still preserved at the lows in the direction of the 27th figure.

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 successful 27th figure overcoming will give the bears’ possibility to test the support near 1.2660 and its breakthrough will increase the downward impulse. The rise above 1.2890-1.2910 will ease it and open the way to the level of 1.2960-1.2980.

Pound

The pound is consolidating near the 61st figure. Despite the fact that the UK 10-year bond yields are now more than 2%, the differential with the American Treasuries is still negative that restrains the bulls to open long positions. The pair GBP/USD continues to trade with a positive sentiment and tries to break through and to consolidate above the resistance level of 1.6130-1.6150.

The support levels are 1.6110 - 1.6130, and the resistance levels are 1.6200 - 1.6220.

MACD is in a positive territory.

Trading recommendations

The consolidation above the level of 1.6110 - 1.6130 will lead to the growth and the resistance level of 1.6200 - 1.6220 testing where the bearish sentiment is possible.

The inability to consolidate above the resistance level of 1.6110 - 1.6130 will lead to the profit-taking by short-term players that will lead to the pound decrease to 1.6040.

Yen

The dollar/yen enjoys a moderate demand amid the US and Japan stock markets’ recovery, as well as the US and Japanese 10-year bond yields extension. Over the last 2 weeks the US dollar has lost 4.1% that makes the current levels attractive to open long positions. The pair growth has continued and the dollar tested the resistance level of 107.20 that hold bulls back. Due to the lower expectations of the Fed’s earlier interest rate increase the pressure on the dollar can be preserved and the bears can retest the 106th figure.

The support levels: 106.50-106.70, and the resistance levels: 107.20-107.40.

The MACD indicator is in a neutral territory.

Trading recommendations

The rise above the resistance level of 107.20-107.40 will signal about the uptrend resumption.