The euro refreshed 11-year low | 19 January 2015

Euro

The euro fell to the new low – it is at the level where it was almost 10 years ago. The SNB statement caused to the euro decrease. The Germany consumer price index rose by 0.2% y/y in December. According to the final data, the euro zone inflation level remained unchanged at the level of 0.2% in December in line with expectations.

The volatility surge led to the sharp movements. The euro/dollar fell to the level of 1.1580-1.600, then rebounded to levels that preceded the fall. The pressure on the pair is still preserved and it resumed its decrease, testing the fresh law at the level of 1.1500-1.5200.

The support levels are 1.1500-1.1520, and the resistance levels are 1.1600-1.1620.

MACD is in a negative territory.

Trading recommendations

The situation remains extremely negative for the euro. It is possible the level retesting of 1.1500-1.1520 in the short term. Thre is no reason to justify its purchase. Its rebounds upwards is possible, but they unlikely will be so large-scale and long-lasting.

Pound

The pair GBP/USD has fallen. The pound was bought out in the morning under the sentiment influence, formed after the last head of Bank of England statement that the British economy will not need additional monetary stimulus, despite the low inflation. The sentiment changed after the Switzerland Central Bank reports. The volatility surge affected the pound/dollar dynamics. The pair moved upwards and downwards, testing the levels of 1.5140-1.5160 and 1.5220-1.5240 and subsequently dropped under 1.5140-1.5160. Its rebounds upwards are limited by the resistance near the 52nd figure. The pound can continue to decline towards 1.5020-15040.

The support levels: 1.5080-1.5100 and the resistance levels: 1.5160-1.5180.

The MACD indicator is in a neutral territory.

Trading recommendations

Its growth and ability to consolidate above the 52nd figure will lead to the resistance around 1.5280-5300 testing. Its growth above the last level will weaken the downward pressure.

Yen

After the SNB news the yen rose against the dollar and other majors due to the urgent investors’ withdrawal in shelter. News introduced the service sector activity index in November, the index recorded a month growth and year on year decline by 0.2% m/m, -1.7% y/y vs. -0.1% m/m, -0.9% y/y, we expected a stronger rise by 0.3% m/m.

To cover losses speculators fixed profit that led to its decline to 116.05-116.25. After this level testing the pair rebounded above 116.95-117.15. The pressure is still preserved and with it the risks of the support around 115.05-115.25 testing.

The support levels: 116.95-117.15, and the resistance levels: 117.95-118.15.

The MACD indicator is in a negative territory.

Trading recommendations

The level of 115.05-115.25 breakthrough will lead to the greater dollar losses. If it manages to consolidate above the 117th figure and overcome the resistance around 118.15-118.35, then under the testing and breakthrough will be the level of 119.25-119.45.