The euro updated the 4-year low and keeps falling | 09 January 2015

Euro

The euro fell to the two-year low expecting that the European Central Bank meeting will be held on January 22 and the ECB will launch the government bond purchases program. Now the euro area inflation is below the Central Bank target value of 2% that helps to reduce the oil price on the world market. For this reason, more than 90% of economists surveyed by Bloomberg forecasted in December that the ECB would launch the monetary stimulus.

Trading recommendations

Now we expect selling with the first target of 1.1950-1.1970. The second target will be 1.1920-1.1900.

Pound

The pound continues to fall against the US dollar. The pair broke through the level of 1.5400-1.5420 and updated the minimum, from April 2013 at the level of 1.5360-1.5380. Now the pair GBP/USD is trading at the mark of 1.5330 with a decrease, noting the daily maximum to 1.5588 and minimum to 1.5330.

According to the US Supply Management, the December manufacturing sector business activity fell to 55.5 against the forecast to 57.5 and November values to 58.7. The new orders index fell to 57.3 against 63.0 a month earlier, while the employment indicator rose to 56.8 against 54.9 a month ago. Export orders index fell to 52.0 against the previous 55.0, for imports - fell to 55.0 against 56.0 a month earlier. The UK PMI manufacturing sector fell to the three-month minimum.

Trading recommendations

It is now recommended to sell with the target of 1.5280-1.5300. If the first target is overcome, the next target is the level of 1.5150-1.5170.

Yen

The pair negated all its previous losses in the first trading day of 2015 amid the lack of visible supports. Probably, the technical indicators allow the yen lowering in the future. According to the November Inflation in Japan continued to slow down that has been going on for four months in a row. So, the official inflation data suggest that it was 2.7% the last month of the year on an annual basis with respect to the October inflation that was 2.9%.

Trading recommendations

We recommend selling with the first target of 120.00-120.20. If the first target is overcome, the new target for the short positions is the level of 118.50-118.70.