The EUR/USD has started a correction | 15 August 2014

Euro

As it was expected and the European Central Bank left interest rates unchanged. According to Mario Draghi the regulator intends to keep rates low for an extended period of time. The chairman has not given the slightest reason to expect the introduction of additional stimulus measures, but it did not become a pretext for the development of upward correction in the euro/dollar. The pair manages to stay above the support around 1.3333. It seems that market participants are still not enough incentive to open positions in one direction or another. We can only wait for the moment when they decide until then the pair is likely to trade between the 33rd and 34th figures.

Trading recommendations

Please be advised to long. We expect a correction towards 1.3500.

Pound

As everyone expected the Bank of England left its interest rates and volumes of the asset purchase program unchanged. The British pound reaction to this event was quite modest, the pressure on it is still present and the pound continues to decline testing 1.6760. Obviously, the central bank is in no hurry to raise interest rates, as well as with the winding down of quantitative easing, so the downward correction remains in its active phase and in the short term GBP/USD could fall to the 67th figure which taking into account that the pound is oversold can activate bulls.

Trading recommendations

The pound is now advised to sell to 1.6730. Shall the pair overcome the first target it might go down to 1.6690.

Yen

The Japanese currency has resumed its growth amid escalating geopolitical tensions. As the market continues to discuss the introduction of Russia's sanctions against the Western countries. Medvedev said that the import of fruit, vegetables, meat, fish, milk and dairy products will be banned. Russia is also considering banning flights over the territory of Russia in the Asia-Pacific region, as well as Ukrainian airlines transit flights through the airspace of the Russian Federation.

Trading recommendations

We advise to short with the first goal 101.14. After overcoming the first target, sell orders can be opened to 100.54.