The FRS may become the centre of attention again | 11 June 2014

Euro

As it was expected, the euro/dollar growth after the European Central Bank interest rates lowering was related with profit fixing and without long positions increasing on the single currency that would be somewhat illogical because its status as a funding currency was further strengthened. Thus, it becomes understandable the EUR/USD decrease, as a result the pair broke the support around 1.3620 and the "bears" tested the mark 1.3582.

The support levels are 1.3535- 1.3560, and the resistance levels are 1.3590- 1.3600.

MACD is in negative territory. The histogram is descending.

Trading recommendations

The falling risks to 1.3535 are increased again. To loosen the "bear" pressure the pair has to return above 1.3650, and for the uptrend resumption to overcome the resistance around 1.3700.

Pound

The investors focus their attention to the April industrial production report in the UK. The leading indicators show a negative background – a seasonal factor indicates the weak data, as the index of industrial orders according to CBI went into negative territory in the first month of spring, showing a decrease by 7 paragraphs.

The pound/dollar also could not continue the growth which began last Thursday. It failed to grow and consolidate above 1.6830. Instead it fell below the support at 1.6820 yesterday. This suggests that the pound will decrease now.

The support levels are 1.6700 - 1.6720, and the resistance levels are 1.6770 - 1.6750.

MACD histogram is descending thus giving a sell signal.

Trading recommendations

The pound growth in the cross the pound/euro will support the pair. The growth and ability to consolidate above 1.6842 will lead to the 69th figure testing.

Yen

The Japan's GDP Final Report in the first quarter gave the traders a pleasant surprise, thereby once again to convince investors that the Japanese monetary control is on the right track. Against this background, we should not expect the strong yen weakening.

The pressure on the dollar/yen is still present, although the "bulls" made a couple of attempts to return to the growth path. Yesterday, they were able to provide support at 102.37, but today in Asian session, it was broken, and now the "bears" may test support at 102.20-102.00.

The support levels: 120.30-102.40, and the resistance levels: 102.70 – 102.80.

The MACD is above the zero line and decreasing confirming the current southern movement.

Trading recommendations

Losing the last level will lead to testing 101.59. If the "bulls" are able to hold above the 102-th figure and break the resistance at 102.80, then we can talk about the uptrend resumption.