The pound is still in a downward trend | 27 October 2014

Euro

We expect the important macroeconomic statistics and against this background, we expect a horizontal flat within the euro/dollar. The US and German 10-year bond yields are without significant changes, confirming the lateral trend. The sentiment in the euro/dollar remains negative. The pair tested fell below the support level of 1.2660 but it was unable to fixate below. Then the euro/dollar consolidated above this level.

The support levels are 1.2640-1.2660, and the resistance levels are 1.2730 - 1.2750.

MACD is in a negative territory

Trading recommendations

The inability to develop its growth above 1.2660-1.2680 indicates the possibility to fall to 1.2480-1.2500. To lower the downward pressure the euro needs to rise above 1.2730-1.2750 and for a larger upward correction the euro needs to overcome the resistance level of 1.2890-1.3110.

Pound

The UK GDP publication for the 3rd quarter will be the main event of the day. There was the personal consumption decrease in the third quarter and the net imports growth that is a negative factor for an economic growth. The labor market strong growth indicates that the data release is slightly better than the forecasted medians at the level of 0.8%.

The pound/dollar continued its decline and tested the support level of 1.6020-1.6040 and then the pair was able to regain some lost ground, recovering above this level. Nevertheless, the sales interest is still preserved with the risks of the support breakthrough and the pound decrease in the direction of the support level of 1.5940-1.5960.

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

MACD is in a neutral territory.

Trading recommendations

If the pair can consolidate above 1.6020-1.6040, bulls will be able test the resistance level of 1.6130-1.6150.

Yen

The US and Japan bond yields showed a strong increase that indicates the clearly bullish sentiment within the US dollar. The upward dynamics will also support the pair demand on the global stock markets in view of the strong direct correlation. The US weak new building sales release can freeze the bulls’ enthusiasm. The pair dollar/yen rose from the support level of 107.00-107.20 to the resistance level of 108.40-108.60 and after the level testing the pair rebounded to 107.70-107.90. The dollar/yen uptrend remains in force.

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

The pair inability to rise up and consolidate above the level of 108.40-108.60 can trigger the profit taking and the downward correction resumption. The fall below 107.00-107.20 will signal about it. The level of 108.40-108.60 breakthrough of will open the way to the 109th figure.