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The euro upward correction may be continued

24 March 2015, EUR/USD


The euro upward correction may be continued

The euro strengthened against the dollar and ended the trading day with a growth. The most interesting messages this week among will come from the Eurozone and its leading countries activity indices initial assessment (PMI) in March as well as the Germany business sentiment report by the IFO institute. The manufacturing and the services purchasing managers' index in the European bloc is expected with a growth to 51.6 from 51.0 in March and 53.9 to 53.7 respectively.

The profit-taking led to the pair sharp growth to the level of 1.0900-1.0920. This growth has attracted fresh demand for sale against which the pair returned to the support near 1.0750-1.0770. Nevertheless, the euro broke through the resistance near 1.0900-1.0920.

The support levels are 1.0880-1.0900, and the resistance levels are 1.1000-1.1020.

MACD is in a positive territory.

Trading recommendations

The pair will have to fixate above the level of 1.0880-1.0900. Its breakthrough will allow the psychological level of 1.1000-1.1020 testing where the bears’ activity is possible. The pair’s growth above this level will jeopardize the level of 1.1070-1.1090 testing and breakthrough which currently seems unlikely.


The euro upward correction may be continued

The British pound has also grown against the dollar. Possibly, the pound was supported by the UK economic data that pointed out to the UK finance improvement. The February Consumer Price Index (CPI) is expected with the year-on-year decrease to 0.1% y/y against 0.3% y/y in January, but the inflation rate prospects – the producer prices are expected with the preserving minus in annual terms.

The pair pound/dollar growth towards 1.5160-1.5180 was used to open fresh short positions which led to the pair decrease towards the support near 1.4680-1.4700. Nevertheless, the pair was sold off there and returned to the psychological level of 1.5000-1.5020. Bulls did not manage to break through above this level, the pair’s decline is limited by the support near 1.4880-1.4900 which preserves the chances of another level of 1.5000-1.5020 testing.

The support levels: 1.4880-1.4900 and the resistance levels: 1.5000-1.5020.

The MACD indicator is in a positive territory.

Trading recommendations

The support loss will call into question the pound ability to continue its growth. In this case we should expect the pound decrease to the 48th figure. While the pair is trading below 1.5000, the risks of the fall resumption will be quite high.


The euro upward correction may be continued

The Japanese yen rose against the dollar, despite the fact that the Japanese and Chinese stock markets ended the week with an increase. It is assumed that the inflation fell slightly in February – the CPI is expected at the level of 2.3 against the previous level of 2.4, unemployment decreased by 0.1% to 3.5% while household spending has corrected for the better, -3.1% y/y after -5.1% y/y in January. The support breakthrough around 121.10-121.30 as well near the 120th figure led to the pair dollar/yen decrease towards 119.25-119.45. Later it returned to the level of 121.10-121.30 from which it again came under pressure and fell below the support near 120.00-120.20.

The support levels: 119.05-119.25, and the resistance levels: 120.20-120.40.

The MACD indicator is in a negative territory.

Trading recommendations

The pressure on the dollar is still preserved and its attempts to return and consolidate above 120.00-120.20 are unsuccessful that keeps the risks of a decrease to the last week lows. Its growth and ability to consolidate above 120.00-120.20 will allow bulls to test the resistance near 121.30-121.50.

Ruban Sergey
Analyst of «FreshForex» company
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