The pound recovers from the new lows | 26 December 2014

26 December 2014, EUR/USD

Euro

The European currency traded different directional against the dollar. The good US economic indicators put pressure on the euro as well as the economic releases absence. Our attention will be draw to the France employment release that is likely once again will point out to the negative dynamics, denoting an increase in the unemployed army. After breaking through the support at the level of 1.2250-1.2270, the euro/dollar was able to consolidate below and to break through the level of 1.2180-1.2200. We should not talk about a significant pair overvalued.

The support levels are 1.2120-1.2140, and the resistance levels are 1.2200-1.2220.

MACD is in a negative territory.

Trading recommendations

The next bears’ target can be the low at the level of 1.2000-1.2020. There can be possible the bulls activation. To weaken the downward impulse the pair should return above 1.2270-1.2290.

Pound

The British pound fell against the dollar and noted on the one-year low. The third quarter UK GDP was unexpectedly revised down and the annual growth rate fell down to 2.6% y/y from 3.0% y/y previously announced. According to the British Bankers' Association (BBA) the mortgage-lending fell down to 36.7 thousand. vs. 37.2 thousand in November while we were waiting for a slight improvement by 37.3 thousand. The pair pound/dollar continued its decline and tested the support near 1.5545. Moreover, this level was broken through that resulted in the reduction to the next support near 1.5485. The pair attempts to recover are limited by the resistance near 1.5527; the next one is near 1.5545.

The support levels are 1.5510-1.5530, and the resistance levels are 1.5600 - 1.5620.

MACD is in a negative territory.

Trading recommendations

Pressure on the pair is still preserved and with it the breakthrough risks of the level of 1.5460-1.5480 and the pair decrease towards 1.5395-1.5415. To weaken the downward dynamics the pound needs at least to return and consolidate above 1.5600-1.5620.

Yen

The yen has slightly strengthened, and probably amid the profit taking ahead of the news release. The US will release the initial jobless claims dynamics for the last week; the forecast assumes a slight increase - up to 290 thousand against 289 thousand earlier. It is obvious the Japanese yen decline, against which the pair dollar/yen confidently broke through the psychological level of 120.00-120.20 and rose above this level, after which rebounded to the support around 120.00-120.20.

The support levels: 120.00-120.20, and the resistance levels: 121.30-121.50.

The MACD indicator is in a positive territory.

Trading recommendations

The pair demand is still preserved and bulls can retest 121.30-121.50 and its breakthrough will lead to a growth to 122.40-122.60. During the holidays, its liquidity will be low that increases the risks of inadequate movements, so we do not forget about the protection order.

Ruban Sergey
Analyst of «FreshForex» company
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