The EUR is expected to grow | 01 August 2014

Euro

The trader's attention was focused on the preliminary July inflation data in the euro area. We also got the similar data from Germany and Spain.

Prior to the U.S. GDP and employment release from ADP, the euro/dollar was trading with depressed sentiment, but the 34th figure area support resisted the "bears" attack. After the strong GDP data release the level was broken and the euro tested the 1.3375 mark. The decrease wasn’t continued due to the FOMC meeting results the pair returned to the 34th figure.

The support levels are 1.3355- 1.3375, and the resistance levels are 1.3420 - 1.3440.

MACD is in a negative territory.

Trading recommendations

No one can speak about the euro downtrend completion. Nevertheless, its oversold may lead to the bigger corrective movement higher. The euro needs to go back and consolidate above 1.3420, as well as to overcome the resistance around 1.3480 to make this move.

Pound

In the absence of the UK and USA important macroeconomic releases publication the market participants should carefully monitor the EUR/GBP cross-course quotations dynamics. The pair has been consolidating the last few trading days and in case of bearish trend continuation we expect the pound recovery. The pound was strong enough to weaken in the past three weeks and on this background we can expect the profit-taking on the short positions and the GBP/USD price growth.

After the strong United States GDP data release the GBP/USD has broken through the support at 1.6900, where the rising support line locates and then fell to 1.6850.

The support levels are 1.6830 - 1.6850, and the resistance levels are 1.6900 - 1.6920.

MACD is in a negative territory.

Trading recommendations

The pound downward correction remains in force, and only weak tomorrow non-farms will temporarily reverse the downward pressure. The rise above 1.6980 will return the "bulls" confidence.

Yen

Japan will publish the June wages level data. This indicator is a strong inflation component which is always scrutinized by the market participants.

Against this background we can expect the lateral trends development during the day. The dollar/yen is supported by the United States macroeconomic statistics and confidently moves higher and higher. The "Bulls" managed to break through resistance at 102.30 which allowed them to test the 103.00 mark.

The support levels: 102.50- 102.70, and the resistance levels: 103.00- 103.20.

The MACD indicator is in a positive territory.

Trading recommendations

The return below 102.30 will proof the downtrend resumption.