The EUR/USD upward movement is too weak | 16 Septiembre 2014

Euro

The ECB expects the consumer price index gradual increase by the end of the year and intends to closely monitor the situation, in particular the inflation risks. The Central Bank is ready to take the additional measures if necessary. The euro/dollar finished the trading within the range limited by the support level of 1.2890 and the resistance level of 1.2960. All attempts to rise above were unsuccessful, indicating the market participants continued negative sentiment to the single European currency.

The support levels are 1.2870- 1.2890, and the resistance levels are 1.2960 - 1.2980.

MACD is in a neutral territory.

Trading recommendations

The euro/dollar is necessary to overcome the current resistance. In this case, we should expect the growth to 1.3030-1.3050. This level break will lead to an increase to the level of 1.3100.

Pound

The sterling rose the previous week, though, in general, remaining under pressure. The Scotland remains in the spotlight. The Prime Minister Cameron said that the monetary union would not work. He also added that if the Scotland separated from the UK, it would not be able to use the pound. The possible UK split has mainly taken into account, so the market will still focus on the rate hikes expectations. The Bank of England is unlikely to raise the rates until May. While someone believes that the increase could take place later this year. The pound/dollar was able to recover to the level of 1.6300 after the recent polls in Scotland when the bulls’ enthusiasm came to nothing.

The support levels are 1.6180 - 1.6200, and the resistance levels are 1.6300 - 1.6320.

MACD is in a neutral territory.

Trading recommendations

The British currency could remain under pressure till Thursday inclusive, although there may be the volatility dash. We expect the level of 1.6300 - 1.6320 retest, followed by a long consolidation.

Yen

It was a national holiday "Day of Respect for the Elderly" in Japan yesterday; thereby the trading was not active. We saw a number of weak economic reports from Japan, but it is expected that the GDP for the July-September will be released in a plus. The large increase in Japan's GDP in the first quarter also played a role in the GDP fall in the second quarter. At the same time the employment situation and the incomes are getting better. The Bank of Japan head Kuroda said the bank would correct the policy if there were risks to the price stability. The positive attitude to the USD/JPY is still present and the bulls looks started testing the psychological level of 110.00.

The support levels: 107.00- 107.20, and the resistance levels: 107.80- 108.00.

The MACD indicator is in a positive territory.

Trading recommendations

The pair is currently limited by the level of 107.20. The dollar inability to overcome this level can lead to profit fixation and the pair decrease. The support level of 107.20 breakdown will decrease the pair to 106.50-106.70. The next support is around 106.10-106.30.