Germany is likely to avoid the recession | 22 October 2014

Euro

We do not expect the important macroeconomic statistics. Traders are interested in the US real estate sales releases on the secondary market. The first real estate market releases point to the demand recovery after the August recession. Traders do not hurry to open position in the US CPI publication anticipation that is scheduled for Wednesday, October 22.

The pair EUR/USD has bounced from the support level of 1.2710-1.2730 and slowly but surely has risen to the resistance level of 1.2800-1.2820. Then the price sharply fell to the level of 1.2710-1.2730. The bears’ activation is possible at the current levels.

The support levels are 1.2710 - 1.2730, and the resistance levels are 1.2800 - 1.2820.

MACD is in a neutral territory.

Trading recommendations

Shall the pair grow above the level of 1.2800 the bulls will face the resistance level of 1.2890 and 1.2960. The loss of the support level 1.2730 will signal the downtrend resumption.

Pound

The pound has recently strengthened against the US dollar, but it is too early to talk about a full correction. The sterling slightly fell at the end of the trades. The UK 10-year bond yields in relation to the American Treasuries and German bonds fell on Monday which is a bearish factor for the British currency. The pound/dollar resumed its recovery. Though the market activity was at the low level, the pair broke through the resistance level of 1.6110-1.6130 and got to the resistance level of 1.6200-1.6220. Then the pair decreased to the level of 1.6110-1.6130.

The support levels are 1.6110 - 1.6130, and the resistance levels are 1.6200 - 1.6220.

MACD is in a positive territory.

Trading recommendations

Should succeed the bulls will be able to test the level of 1.6200-1.6220 where the bears’ activation is possible. To return control over the situation the bears need to go back below the level of 1.6110-1.6130.

Yen

Stock markets share optimism can support the pair dollar/yen demand amid the empty macroeconomic calendar. The leading American stock market indicators showed steady quotations growth. The Nasdaq index was the growth leader that is a positive factor for bulls. With the beginning of a new trading week the US with the Japanese yen rose to the level of 107.20-107.40 that was again under the sellers’ pressure that caused the pair exchange rate decrease to the support level of 106.10-106.30. Then the pair rose to the resistance level of 106.70-106.90.

The support levels: 106.10-106.30, and the resistance levels: 106.70-106.90.

The MACD indicator is in a neutral territory.

Trading recommendations

The dollar decrease is caused by the long positions profit taking, so we do not expect the top and trend reversal correction as the pair is trading above the 104-th figure. Therefore, the risks of the renewed dollar growth are still preserved. The US dollar needs to get back above 107.20-107.40 in order to grow.