The EUR/USD can break below 1.3100 | 04 September 2014

Euro

We don’t expect a lot of important macroeconomic statistics. We expect the July euro area retail sales release. Last week we received the disappointing Germany retail sector sales results as well as the euro area consumer confidence which cannot expect the positive release yield. On the eve of the ECB meeting we should not expect the euro strong sales.

In the overall picture there are still no changes in the euro/dollar. The pair remained under pressure but the "bears" have not been able to get below 1.3100. The pair fluctuations were stopped at the resistance level of 1.3160.

The support levels are 1.3080- 1.3100, and the resistance levels are 1.3160 - 1.3180.

MACD is in a negative territory.

Trading recommendations

The liquidity is low as the market participants expect the ECB meeting results announcement. The treading is likely to be too sluggish, but the pair is oversold so it may correct up to 1.3220.

Pound

We expect the third PMI index release, this time in the service sector. The July USA ISM manufacturing index spread and the UK PMI increased in the dollar favor for the first time in the last 10 months, and in August we observe the United States position strengthening. There also was the massive pound sell-off against the most of its competitors which is also the strong bearish factor. The pound broke support at 1.6570, and then fell under 1.6500 against the dollar. The pair consolidates.

The support levels are 1.6410 - 1.6430, and the resistance levels are 1.6500 - 1.6520.

MACD is in a negative territory.

Trading recommendations

Undoubtedly, the pound is oversold suggesting an upward correction. To go to the bottom is usually a very risky business, so we are waiting for the significant bounce up.

Yen

The bulls are ready to set a fresh current year maximum and they have the great opportunities for this. However, against the background of the empty macroeconomic calendar, we can expect the market participants to be quiet. Technically, the dollar/yen is short-term overbought.

The USD/JPY continues to be traded with the positive sentiment. The dollar tested the level of 105.30 and then fell back to 104.86. The demand for it is saved and with it the level of 105.44 testing high risks.

The support levels: 104.50- 104.70, and the resistance levels: 105.00- 105.20.

The MACD indicator is in a positive territory.

Trading recommendations

The inability to consolidate above the 105th figure could trigger the profit-taking followed by the decrease to the 104th direction. The United States employment data publication can impact the pair dynamics. The weak data and the 2013/2014 maxima proximity may be the reason for the large-scale yen short positions reduction.