04 March 2015, EUR/USD
The European currency held the previous session against the dollar in the narrow side corridor and closed the day on the opening prices. The Germany retail sales are expected with the volume decrease by 0.3% m/m in January after + 0.2% m/m in December, but the Euro zone producer price index (PPI which can indicate a certain degree on the inflation outlook, is expected with a decrease continuation -0.7% m/m, -3.1% y/y after -1.0% m/m, -2.7% y/y.
The pair euro/dollar stopped to fall. Instead, there was a modest recovery against which the pair rose up to the resistance around 1.1220-1.1240.
The support levels are 1.1100-1.1120, and the resistance levels are 1.1220-1.1240.
MACD is in a negative territory.
However, the interest to short is saved on the growth and the pair returned to the level of 1.1174. It is quite possible to expect a consolidation between the support 1.1100-1.1120 and the resistance level of 1.1220-1.1240 before the important data output and this week events. The risks of the support breakthrough and the pair reduction continuation is still high.
There were unhurried “cable”, probably, on the support caused by the UK economic news flow. We received the construction sector business activity indices. According to Markit/CIPS reached the mark of 60.1 in February against 59.10 in January, the forecast was 59.00. The new business and business projects activity increase left the December lows and demonstrated the sharpest growth since October. Once pressurized the pair pound/dollar broke through the support near 1.5395-1.5415 and fell down to 1.5330-1.5350. It needs to consolidate above the broken through level to keep growing, otherwise it can continue its decline towards the levels of 1.5260-1.5280.
The support levels: 1.5330-1.5350 and the resistance levels: 1.5395-1.5415.
The MACD indicator is in a negative territory.
It is doubtful that speculators will open positions in one or another direction in large quantities in the short term before the Bank of England decision announcement and the US labor market data publication, so the next few days the trade is possible in the range.
At the current session the yen strengthened against the dollar and almost leveled the previous trades’ losses. The Japan economic data reported about the monetary base. As it turned out, the indicator recorded the level higher than it was forecasted - 36.7% y/y after a 37.4% y/y when it was expected a reduction to 34.3% y/y. There was quite expected the 120th figure testing. Moreover, the dollar managed to test the mark of 120.20-120.40. Again the dollar came under pressure, it returned below the 120th figure, falling to the level of 119.55.
The support levels: 119.05-119.25, and the resistance levels: 120.20-120.40.
The MACD indicator is in a positive territory.
The dollar’ inability to consolidate above 120.20-120.40 is a wake-up call for the bulls and increases the risk of the downward correction resumption. However, we should not hurry with the massive sales before the US labor market data release, it is possible that the pair will find the support around 117.95-118.15.