The ECB pushed the EUR/USD down | 31 October 2014

Euro

The US Fed expects the inflation decline in the short-term and the long-term forecasts were not subjected to revision. There are two important macroeconomic reports on the traders’ agenda: the US GDP and the Germany’s CPI. With regard to the first release, the leading indicators point to the data release that will be slightly better than the forecasted medians and in its turn will support the US dollar.

After the FOMC meeting results announcement traders actively bought the US dollar and against this background the euro/dollar fell below the support level of 1.2660 and bears tested the mark of 1.2580. The level breakthrough leads the consolidation phase completion and the downtrend resumption.

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

We should expect the lows testing at the level of 1.2500 and its breakthrough will discourage bulls on the base formation and the upward correction development.

Pound

The key event will be the US GDP publication. It is worth noting that we saw the net exports and the level of employment growth in the third quarter. The private consumption showed moderately positive dynamics and in this regard we can expect the data output slightly better than the forecasted medians. The pound/dollar consolidation lead to the support level of 1.6110-1.6130 breakthrough and the pair fell below the level of 1.6020-1.6040 and tested the level of 1.5940-1.5960.

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 level of 1.5940-1.5960 breakthrough suggests the fall continuation and testing the support level of 1.5850-1.5870.

Yen

The third quarter US GDP report can please the traders with the positive data that will encourage the bulls for the long positions opening. The Japanese stock market feels comfortable after the Japan industrial production strong data publication in September.

After the Federal Committee meeting results announcement on the Fed open market operations the dollar resumed its rise against most of its competitors, including the Japanese yen. Thus the resistance level of 109.00-109.20 was broken through, after which the dollar rose to 109.40-109.60.

The support levels: 108.80-109.00, and the resistance levels: 109.40-109.60.

The MACD indicator is in a positive territory.

Trading recommendations

The bulls can test the resistance level of 109.90-110.10. The fall below 108.20-108.40 that looks unlikely now, can signal about the downward correction resumption.