The GBP/USD downtrend risks are still preserved | 12 November 2014

Euro

We should expect the downward trend during the day amid the lack of interesting macroeconomic releases. The traders are already tired of the euro sales and pay their attention to the corrective movement development. However, the US strong economic data still cause the traders’ excitement who are willing to keep the "longs" within the dollar for a long time.

We should not still talk about the downtrend resumption, at least until the euro is trading above the 24th figure.

The support levels are 1.2405-1.2425, and the resistance levels are 1.2500-1.2520.

MACD is in a negative territory.

Trading recommendations

The chances for the 25th figure testing are still preserved and its breakthrough will allow bulls to test the resistance level of 1.2580-1.2600. The loss of the 24th figure will jeopardize the lows at the level of 1.2330-1.2350.

Pound

You can expect the moderate pound decline during the day. The Bank of England inflation report for the 4th quarter will be published today and the British pound can be hit once again amid the low inflation expectations in the UK. We should distinguish the bearish trend in the commodity market that has a positive effect on the US dollar.

The pair GBP/USD break through the resistance level of 1.5870-1.5890. It intended to test the resistance level of 1.5960-1.5980.

The support levels are 1.5850 - 1.5870, and the resistance levels are 1.5960 - 1.5980.

MACD is in a negative territory.

Trading recommendations

The pound inability to overcome the resistance level of 1.5960-1.5980 and the loss of the support level of 1.5850-1.5870 should be seen as a negative technical factor, giving a reason for the support testing near the 58th figure in the short term. In turn, the rise above the level of 1.5850-1.5870 allows the bulls to test the level of 1.5960-1.5980.

Yen

Japan will publish the payment balance report for September. We observe the positive payment balance growth in September. Nevertheless, the Central Bank of Japan gold reserves decreased in September in comparison with the previous month, indicating the surplus reduction. Taking in consideration that the forecasted medians are showing 250.6 billion yen increase in comparison with August – we can expect the data release to be slightly worse than the forecasted medians that will put some pressure on the Japanese yen.

The dollar/yen correction has not received its continuation. Having found the support at the level of 114.00-114/20, the dollar could return above 115.25-115.45. Moreover, it rose to 116.05-116.25, overcoming the previous highs.

The support levels: 115.05-115.25, and the resistance levels: 116.25-116.45.

The MACD indicator is in a positive territory.

Trading recommendations

The dollar will test the 116th figure in the short term and we should expect its growth towards 120.00 in the long term. The dollar fall below 114.00-114.20 will signal about the downward correction resumption.