The pound fell after the British statistics | 07 January 2015

Euro

The euro weakened against the dollar. We expect the December PMI activity indices final assessment. Forecasts suggest that there should not be any changes - all indicators except for the French will remain in the growth zone above 50.0. The EUR/USD continued to fall, marking fresh lows at the level of 1.1860-1.1880. The speculators decided to take profits as a result the pair was able to recover to the resistance around 1.1950-1.1970. Undoubtedly, this recovery does not mean the downward trend reversal and the risks of its resumption are preserved.

The support levels are 1.1880-1.1900, and the resistance levels are 1.1950-1.1970.

MACD is in a negative territory.

Trading recommendations

A recovery towards 1.2020-1.2040 can be used for the short positions re-opening with the following current lows testing. The pair growth and ability to consolidate above 1.2020-1.2040 will ease the downward pressure.

Pound

The British pound was among the hardest hit during the yesterday's session. The report, presented the PMI index for the construction sector, noted decline in December more than expected - the indicator is fixed at the level of 57.6 versus 59.4 in November, when we waited for the reduction to the level of 59.2. The December PMI index for the services sector is expected with an increase to 58.9 from 58.6.

Continuing its decline, the pound/dollar broke through the support at 1.5280-1.5300 and fell to 1.5200-1.5220. After the level testing the pair slightly recovered, approaching the resistance at the level of 1.5280-1.5300 that is still successfully holding back the bulls attack. Then the pound broke the level of 1.5200-1.5220 and tested the support 1.5140-1.5160.

The support levels: 1.5140-1.5160 and the resistance levels: 1.5220-1.5240.

The MACD indicator is in a negative territory.

Trading recommendations

The level breakthrough of 1.5140-1.5160 will strengthen the downward pressure and open the way to 1.5080-1.5100. Rebounds towards 1.5360-1.5380 can be used for the short positions re-opening, the pair growth and ability to consolidate above the last level can signal about the pound temporary "bottom".

Yen

The dollar/yen showed a growth for a short time. Most of the day the price was going down and the session ended with the dollar decline against the yen. The news showed the monetary base growth in Japan, there was marked + 38.2% y/y vs. 36.7% y/y in December that was better than expected - reduction to 34.3% y/y. The bulls’ inability to overcome the resistance around 120.20-120.40 within the dollar/yen triggered profit-taking on the long positions that led to the pair decrease and the level of 119.05-119.25 testing. Moreover, this level was broken through and the pair fell and tested the level of 117.95-118.15, breaking through another target of the 118th figure.

The support levels: 117.95-118.15, and the resistance levels: 119.25-119.45.

The MACD indicator is in a negative territory.

Trading recommendations

Its falling is being continued to attract buying interest, but for the growth resumption the dollar need to return and consolidate above 120.00-120.20. Otherwise, the downward correction will gain momentum. We should not still speak about the end of the uptrend.