The euro/dollar dynamics is not encouraging | 24 March 2014

Euro

The European officials said they would consider the possible sanctions against the Russian Federation, which can trigger a new round of the geopolitical tensions. In the absence of interesting macroeconomic reports from the Eurozone and the United States the outcome of the European summit can lead to the further reduce of the euro/dollar pair. From the perspective of technical analysis, the single European currency is now short-term oversold and can be expected to profit taking on short positions. In general, we can expect the prevalence of the "bearish" sentiment during the day.

The support levels: 1.3740-1.3707, and the resistance levels: 1.3810 -1.3833.

MACD goes down if the indicator unfolds upstairs, it can attest to turn the upward correction.

Trading Recommendations

The pressure on the pair still remains, and 1.3720 support may still be the goal of the bears. The possible rise to 1.3800/10 should be used to open the short positions, and in case of the resistance level 1.3845 breakdown the strategy should be reconsidered.

Pound

Britain and the U.S. didn’t please the investors with a publication of interesting macroeconomic releases. In the lights of this background, a side trend is possible. The support for the British currency can come from the cross-rate EUR/GBP, the continuation of the "bearish" trend will benefit the "cable" quotes versus the U.S. dollar.

The support levels: 1.6415 - 1.6435, and the resistance levels: 1.6555 - 1.6582.

MACD is pointing down which indicates the current downward price movement, if the indicator unfolds the top, it may be a correction confirmation.

Trading Recommendations

The kickbacks to 1.6520 continues to attract sellers’ interests that makes possible the pair decrease in the direction of 64th figures. The growth attempts to 1.6520-1.6568 should be used to open short positions, after breaking through the last level we will review the trading strategy.

Yen

Despite the long-term uptrend - the pair dollar/yen isn’t strong enough to continue a growth. The geopolitical risks still persist despite a lull in the confrontation of the Russian Federation and the countries participating in G- 7, which acts as a negative factor for the growth of the Japanese stock market. The head of the Bank of Japan Haruhiko Kuroda said that there was a need to achieve the inflation target of 2% as quickly as possible. Now we can conclude that the regulator will continue putting pressure on the national currency, with the goal of the weakening versus the U.S. dollar.

However, it’s not necessarily that the "bullish" trend starts right now - the mark 102.82 is a very strong resistance level and only after its overcoming it’s possible to open the long positions.

The support levels: 102.16 - 101.66, and the resistance levels: 102.82 - 103.43.

MACD turned down, indicating the current downtrend.

Trading Recommendations

The dollar inability to continue growing and overcoming the last maximum 102.68 is a negative factor that increases the risks of a renewed downward correction. The key support is at 101.22. The growth above 102.68 is very risky for the 103.00 resistance level.