The pound is decreasing after BoE's minutes | 23 Octubre 2014

Euro

The information that the ECB intends to buy the corporate bonds have not been confirmed yet and the European currency has already started to decrease. The ECB plans to launch a fully-fledged quantitative easing program that will allow the deflationary risks escaping. The Federal Reserve meeting will happen the next week and a weak inflation release will foster the FOMC members’ negative comments series about the dollar revaluation.

On the one hand the euro exchange rate is trapped between the resistance level of 1.2800-1.2820 and the support level of 1.2640-1.2660 on the other hand.

The support levels are 1.2640-1.2660, and the resistance levels are 1.2730 - 1.2750.

MACD is in a negative territory.

Trading recommendations

There is a bearish sentiment in the market and we advice to short when the pair is above the level of 1.2800-1.2820

Pound

The pound expects the volatility surge - the Bank of England last meeting minutes will not bring the British currency the tangible dividends. The inflation expectations in the UK began to decline sharply in the second half of September that is a negative factor for the monetary policy tightening. The GBP/USD faced with the irresistible resistance level of 1.6200. The offers located there returned the pair back to the downward direction and it broke through the support level of 1.6110-1.6130. Then it tested the support level of 1.6020-.16040.

The support levels are 1.6020 - 1.6040, and the resistance levels are 1.6130 - 1.6150.

MACD is in a neutral territory.

Trading recommendations

The support breakthrough can significantly increase pound decrease risks at least to the support level of 1.5940-1.5960. The loss of this level would lead to the level of 1.5850-1.5870 testing and its breakthrough will mean the downtrend resumption.

Yen

The tool shows a slight decline, trading near the opening price. We should not expect any surprise from the US inflation release and against this background the dollar will remain under pressure. The easing monetary policy can support a demand in the American market. The stock index S&P500 quotations growth will support the dollar/yen due to the strong direct correlation between the two trading instruments. The bears tried to regain control over the situation, the dollar/yen has failed at the level of 106.10-106.30 where the pair returned to the resistance level of 107.40-107.60. The rebounds are now limited at the local support level of 106.50-106.70.

The support levels: 106.50-106.70, and the resistance levels: 107.40-107.60.

The MACD indicator is in a neutral territory.

Trading recommendations

To resume the uptrend the US dollar needs to overcome the resistance level of 107.40-107.60 and near the 108th figure.