The euro strengthened after Draghi's speech | 23 March 2015

Euro

The European currency regained most of the lost positions and returned to its original positions where it started to decline against the dollar on Thursday. The Germany producer prices rose by 0.1% m/m and decreased by 2.1% compared to last year February. Economists had forecasted an increase by 0.2% m/m and a decrease by 1.9% compared to last year February. The energy prices rose by 0.7% m/m and fell by 5.5% y/y.

The euro with the dollar managed to resume growth and the pair again tested the psychological level of 1.1000-1.1020. Then the pair rebounded to the support level of 1.0610-1.0630. After testing this level the pair increased above the resistance level of 1.0770-1.0790.

The support levels are 1.0750-1.0770, and the resistance levels are 1.0900-1.0920.

MACD is in a positive territory.

Trading recommendations

The level of 1.0750-1.0770 became the resistance. Thus, the upward rally has resumed, but the downtrend remains in force. The current support lose may lead to a decrease towards the support near 1.0610-1.0630. The consolidation is possible above this level.

Pound

The pound also regained the earlier lost positions and it is trading for an increase, having rebounded from the last week laws. The UK state sector borrowings were 6.9 billion pounds compared with February last year to 3.5 billion pounds. The growth is based on the tax revenue record number that is the highest result since 1997.

The pound/dollar growth after the Fed comments did not improve its prospects as the day before it resumed a decrease and broke through the support near 1.4880-1.4900 and fell to 1.4680-1.4700. Then the pair grew up and now its recovery attempts are limited by the resistance near 1.5000-1.5020.

The support levels: 1.4880-1.4900 and the resistance levels: 1.5000-1.5020.

The MACD indicator is in a neutral territory.

Trading recommendations

The pressure on the pair is still preserved as well as the risks of the levels of 1.4750-1.4770 retesting. This support lose may lead to a decrease towards 1.4680-1.4700. The pair's growth and ability to consolidate above 1.4750-1.4770 will ease the downward pressure.

Yen

The dollar/yen started again decreasing being able to cover the previous week gains on Thursday. The Nikkei stock index is trading with a decrease by 0.09% to 19,458.45 points. The political news provided by the Bank of Japan governor speech and the BoJ last meeting minutes publication had no impact on the market. The pair was able to return above the 120th figure, still itfailed to consolidate above it and fell again which increases its decrease chances resumption and the further lows testing.

The support levels: 119.05-119.25, and the resistance levels: 120.20-120.40.

The MACD indicator is in a negative territory.

Trading recommendations

However, the pair needs to overcome the support around the 120th figure to continue a decrease that successfully holds back the bears’ attack. Otherwise, the resistance near the 121-st figure will be again at risk of testing and breakthrough.