The ECB may taper Q1 in June | 21 May 2014

Euro

The euro/dollar was short-termly oversold so we can expect the correction, where the nearest strong resistance can become the mark 1.3776. FOMC held Plosser and Dudley presentations, but we do not expect a market participant’s strong reaction on this event. The Federal Reserve last meeting minutes will be published today so all attention will be focused to this report.

The euro/dollar continued trading in a narrow range where it has already been for a week, except the fall to the 1.3648. Yesterday it grew above 1.3720 and tested 1.3734 before returning to 1.3706. Thus, the situation remains the same - growth efforts are faced with sale interest which maintains the support risks testing at 1.3618.

The support levels are 1.3680- 1.3700, and the resistance levels are 1.3740 - 1.3760.

MACD is in negative territory.

Trading recommendations

The resistance breaking will lead to the growth to the 38th figure, but as the pair is below, "bearish" sentiment still persist.

Pound

The UK consumer price inflation will be published this week. It usually has a significant impact on the pair dynamics. The investors will get the news block about UK April inflation.

The pair also consolidated in a narrow range. The inability to grow and consolidate above 1.6842 is a negative factor for the pair. Theoretically, the "bears" will soon try again to test 1.6730.

The support levels are 1.6810 - 1.6830, and the resistance levels are 1.6900 - 1.6920.

MACD is in neutral territory.

Trading recommendations

The pair dropped to 1.6731, having broken the support at 1.6842-1.6822, which represents earlier broken high. If it cannot go back and consolidate above these levels, we may get the top formation confirmation so then we can expect a larger fall. The next "bears" target may be the support around 1.6700-1.6670.

Yen

Amid the empty macroeconomic calendar we should monitor the world's leading stock exchange situation. We saw a technical correction continuation that was due to long position profit-taking after the fresh U.S. stock indicators historic high.

Yesterday, the pair continued to decrease. After breaking the support at 101.22, it tested 101.10 and then returned to the resistance 101.69 due to a demand growth. Here we can see that interest in sales is still being preserved so "bears" can still try to break below 101.10.

The support levels: 100.80- 101.00, and the resistance levels: 101.40- 101.60.

The MACD indicator is in negative territory.

Trading recommendations

The rise above 101.59 will lead to 102nd figure testing, but as the pair trades below this level, the renewed decrease risks are preserved.