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The GBP/USD renewed the year low

07 November 2014, EUR/USD

Euro

The GBP/USD renewed the year low

The EUR/USD has fallen below the level of 1.2445-1.2425 after the Eurozone service sector PMI index did not meet traders’ expectations, but the retail sales fell by 1.2%. The UK and the US economy is constrained by the slow demand in the euro area. We expect the ECB meeting results and the labor market data publication. The downtrend is still in force, the pair is not overbought, the recovery was only corrective. The euro/dollar sharply decreased and broke the support level of 1.2405-1.2425. The pair is trading below this level.

The support levels are 1.2330-1.2350, and the resistance levels are 1.2425-1.2445.

MACD is in a negative territory.

Trading recommendations

The risks of the support level of 1.2330-1.2350 testing are preserved. At this moment it is better to stay away from the strategic positions opening before the Friday foundation release.

Pound

The GBP/USD renewed the year low

The British pound has fallen against the dollar. The Purchasing Managers Index (PMI) for the service sector in October fell significantly more than it was expected - up to 56.2 from 58.7 in September as we expect to see a decline to the level of 58.5. The business activity index in the US service sector (ISM Non-Manufacturing) in October fell to 57.1 from 58.6 points in September. The decline was forecasted to the level of 58.0 points. The pair GBP/USD sharply fell at the yesterday trades. It had broken the support level of 1.5850-1.5870.

The support levels are 1.5780 - 1.5800, and the resistance levels are 1.5870 - 1.5890.

MACD is in a negative territory.

Trading recommendations

The pound is necessary to rise up and consolidate above 1.5960-1.5980 that might inspire bulls to test the resistance level of 1.6040-1.6060. The level of 1.5850-1.5870 breakthrough will indicate the new wave downtrend development.

Yen

The GBP/USD renewed the year low

The Japanese yen is under pressure against the dollar. The Bank of Japan has extended the current asset purchases program. Now the bank will buy the government bonds and other assets worth 80.0 trillion yen for an indefinite period of time. The Japanese yen is continued to be sold and against this background the US dollar and the yen rose above the level of 114.00-114.20, and increased to the level of 115.25-115.45. The pair is overbought.

The support levels: 114.00-114.20, and the resistance levels: 115.25-115.45.

The MACD indicator is in a positive territory.

Trading recommendations

The pair showed a powerful impulse for the maximum updating. At present we consider the level of 116.25-116.45 testing. Then we expect a decline to the level of 114.00-114.20. The local target is at the level of 111.60-111.80.

Ruban Sergey
Analyst of «FreshForex» company
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