The yen keeps falling further | 03 November 2014

Euro

The traders’ attention is directed to the euro zone inflation publication. We should expect the data release slightly worse than the forecasted medians at the year on year level of 0.3%. The CPI reports were presented by Germany and Spain and both releases came out worse than traders had expected, showing the lower inflationary pressure. The negative sentiment towards the euro/dollar is still preserved, but the single currency found the support at the level of 1.2480-1.2500. There it continues to be sold out therefore the bears’ attempts to break through below are unsuccessful. In turn, the resistance level of 1.2580-1.2600 successfully restrains bulls.

The support levels are 1.2480-1.2500, and the resistance levels are 1.2580-1.2600.

MACD is in a negative territory.

Trading recommendations

The euro growth and the ability to consolidate above 1.2660-1.2680 will signal about the upward correction resumption and the current support breakthrough will lead to the lows testing at the level of 1.2405-1.2425.

Pound

In the absence of the UK and US interesting macroeconomic releases traders turned their attention to the pair EUR/GBP quotes dynamics, and to the bond market. It is worth noting that both factors are showing a mixed trend. It should also identify the UK short and long-term yield spreads which have also shown extension for the recent weeks that signals us about the UK economic slowdown. The pressure on the pound/dollar is still preserved, but the pair is being sold to the support level of 1.5940-1.5960. The growth attempts are limited by the resistance level of 1.6040-1.6060 at this stage.

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

While the pair is trading above 1.5940-1.5960, the chances of the base formation and the larger upward correction development will grow. The support breakthrough will allow bears to test the support level of 1.5850-1.5870.

Yen

The Japan will publish the whole important macroeconomic statistics block where with the inflation data for September. Both the recent positive consumer spending and industrial production releases suggest that monetary authorities will not make negative statements about the Japanese economy perspectives. The unexpected decision by the Bank of Japan to expand the volumes of the asset purchases program gave the dollar an upward impulse.

The US dollar with the Japanese yen broke through the resistance around 108.40-108.60 and that led to its growth, and the resistance level of 109.40-109.60 did not limit the attempts to continue its growth. The pair rose to the level of 112.60.

The support levels: 111.60-111.80, and the resistance levels: 112.60-112.80.

The MACD indicator is in a positive territory.

Trading recommendations

The pair broke the resistance level of 109.40-109.60 and also highs at the level of 110.50-110.70 and rose above the level of 111.80-112.00. It opens the US dollar a way to 114.60-114.80 in the medium term.