The USD/JPY cannot grow higher | 22 May 2014

Euro

In the important macroeconomic publication absence from the Eurozone, we should keep an eye on the EUR/GBP cross - course trading dynamic. Recently the given pair set this year fresh minimum and the next strong support will be the mark 0.8085 which is the 2013 minimum. This factor will have a moderate pressure on the EUR/USD. We are awaiting for the U.S. Federal Reserve last meeting minutes.

We should not expect pleasant surprises from the American regulator. The economic growth rate was extremely low the first three months of the year and we have to wait for the second quarter report that Fed could change its rhetoric statements. In general, the euro / dollar pair can expect the "bearish" sentiment prevalence.

The support levels are 1.3630- 1.3650, and the resistance levels are 1.3680 - 1.3700.

MACD is in negative territory.

Trading recommendations

The euro/dollar briefly went down to 1.3678 then back to 1.3709. Thus, the situation remains the same – the growth efforts are limited by bears’ power which maintains the support 1.3618 testing risks. This resistance breaking will lead to growth to the 38th figure, as the pair trades below the level the "bearish" sentiment will persist.

Pound

Inflationary pressures in the UK begin to intensify. That fact is pretty good for the retail sector. The retail sales report can get little better than the forecasts that might to cheer the "bulls" up to go long.

The euro/pound cross course can may continue the downward trend and in the light of this the pound can update the recent high, located at the level 1.6864. The MPC last meeting minutes have been published but we should not expect any surprises from the British monetary authorities. Last week, Mark Carney once again confirmed that it was not necessary to wait for rate growth before Q2 2015.

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 was trading at 68th figure just before the consumer price inflation release. After the release it jumped to 1.6865, but soon returned to 1.6822. To improve its perspective the pound must grow and consolidate above 1.6865, otherwise the decrease risks will remain. The 68th figure loss will open the way to 1.6731.

Yen

«Swing" by the world's leading stock markets did not support the USD/JPY growth. The Japan Bank meeting publication results is this week main event. The positive GDP report growth in the 1st quarter shows the correct monetary control action course.

This factor will support the moderate demand for the yen. It is worth noting that we have already seen many times as after a decrease to 101 figure, the USD/JPY shows a steady demand from Japanese exporters and the U.S currency quotes for recover the lost ground. We can expect that scenario repeating this week again.

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 "bulls" could not bring the dollar/yen back above the resistance 101.59. The pair returned to the 101.20 support area. The risks to test the support 100.68 are high enough now.