The EUR/USD keeps losing ground | 24 October 2014

Euro

Traders will be focused on the Markit Economics business optimism index publication in the manufacturing sector of the leading eurozone economies. The French and German industrial sector is going through a difficult time, and against this background we should not expect pleasant surprises. The both PMI indexes are now lower than the annual average that points to the strong negative trend.

The pair has broken the support level of 1.2710-1.2730 that led to the fall continuation and the support level of 1.2640-1.2660 breakthrough. Due to its correction the pair came out of the oversold conditions that increase the next support breakthrough risks.

The support levels are 1.2560-1.2580, and the resistance levels are 1.2660 - 1.2680.

MACD is in a negative territory.

Trading recommendations

While the bounces are in the 28th figure direction we should open short positions and not forget about the protective orders. The rise above the 1.2730-1.2750 will open the way to 1.2800-1.2820, but will not change the pair perspectives.

Pound

The slight British economic slowdown with the lower inflationary pressure will have a negative impact on the pound in the short term. We expect the UK retail sales data for September. It is worth noting that we observed the unemployment decrease, as well as the average salary increase from August to September that is a positive factor for the retail sector.

The pound with the US dollar has broken through the support level of 1.6110-1.6130 and then fell below 1.6020-1.6040 where the sales interest is observed.

The support levels are 1.5940 - 1.5960, and the resistance levels are 1.6040 - 1.6060.

MACD is in a negative territory.

Trading recommendations

The consolidation below 1.6020-1.6040 will open the way to the support level of 1.5940-1.5960. The return above 1.6130-1.6150 will weaken the bearish impulse, but the increase above 1.6200-1.6220 will make us reflect upon the effective pound sales strategies.

Yen

The US dollar was supported amid the Japan bond yields increase and due to the low commodities demand. The pair dollar/yen rose again and tries to break the resistance level of 107.90-108.10 amid the renewed interest in the dollar demand. This level continues to withstand the bulls‘onslaught, but the US dollar is sold on bounces. That increases the resistance level of 108.40-108.60 breakthrough risk.

The support levels: 107.70-107.90, and the resistance levels: 108.40-108.60.

The MACD indicator is in a positive territory.

Trading recommendations

In this case, the dollar will continue to grow and test the resistance level of 108.40-108.60. Decrease below 107.00-107.20 will weaken the upward impulse and will call into question the dollar ability to continue the growth.