The EUR/USD stuck in the range | 13 May 2014

Euro

We do not expect important macroeconomic statistics from the Eurozone and the U.S. The single European currency is technically highly oversold and we can expect some consolidation - some investors decide to take profits on short positions, but the dollar uptrend is gaining momentum and should only trade in the direction of the trend. Open long positions are not advised as the famous exchange saying The Trend is Your Friend.

The support levels are 1.3720- 1.3740, and the resistance levels are 1.3810 - 1.3830.

MACD is pointing down, indicating the current downtrend movement rates.

Trading recommendations

Euro continued to show a positive trend, testing resistance at 1.3956. During the Mario Draghi press conference, EUR/USD has broken through this level and tested the 1.3993 and then started to decline. As a result the euro fell to 1.3833 and the decline continued and the EUR/USD tested the support around 1.3745. Thus, the outlook sharply got worsen, but the "bears" still need to overcome 1.3745-1.3672 support area. There it may bounce higher to be used to open short positions. The growth above 1.3900-1.3920 will jeopardize 1.4000.

Pound

In the absence of important macroeconomic statistics from the UK we expect some GBP/USD recovery. The current exchange rate looks attractive to short-term speculators and can be used to open a small number of long positions. However, we should not count on a strong growth as the last week maximum values update need serious "drivers". The support levels are 1.6840 - 1.6860, and the resistance levels are 1.6910 - 1.6920.

MACD is pointing down, indicating the current downtrend movement rates.

Trading recommendations

Last week, the GBP/USD found resistance at the level 1.6853 and from it could grow and tested 1.6996. It's expected to rise to the psychological level 1.7000 and that became the reason to lock in profits, as the result the pair returned to the support 1.6840. This fall significantly impairs the GBP/USD outlook. Thus growth attempts should be seen as an opportunity to open short positions. The break through the resistance 1.6915-1.6940 will lead to 1.7000 testing.

Yen

Japan published the balance of payment in March. In the first month of a spring, the Japanese economy showed a steady growth and we can expect the release of the data slightly better than the median forecast. The situation in Ukraine can cause a sell-off in stock markets that will also pressure the pair. The support levels: 101.50- 101.70, and the resistance levels: 102.23- 102.43.

The MACD indicator is in neutral territory.

Trading recommendations

The dollar/yen fell again to the support 101.43, and the "bears" again were unable to penetrate it. The pair bounced to 101.86. Then the growth was continued and the dollar tested the mark 102.04. The situation is the same; the risks of ongoing support level breakthrough and development of a larger correction are kept. The pair should grow and consolidate above 103rd figure to loosen the "bear" pressure.