The euro keeps growing. What's next? | 06 April 2015

Euro

The euro was the leader at the previous trades and at the end of the day it strengthened against all of its major competitors. The Greece problems are not solved and Athens must pay back 450 million euros to the International Monetary Fund (IMF) on April 9th. In addition, there is an increasing concern about the situation in Italy which also has a significant debt while its economy has been in recession for almost three years. The US Labor Department reported that the Non-Farms increased by 126,000 in March with correction for seasonal variations. This is the slight increase from December of 2013.

Traders took profits on the short positions amid the Greece news and the US labor market publication which led to its rise against the US dollar to the resistance near 1.1000-1.1020.

The support levels are 1.0880-1.0900, and the resistance levels are 1.1000-1.1020.

MACD is in a positive territory.

Trading recommendations

Thus, bulls have another chance to test the psychological level of 1.1100-1.1120.

Pound

The British pound came out of the side range that was formed earlier and closed with a growth against the dollar. The construction sector PMI index fell to 57.8 from 60.1 in March when it was forecasted to see 59.7.The result above 50.0 indicates the construction sector growth and the March level can be considered a positive fact, but the fact that the index has decreased below the forecasted levels can upset investors.

Non Farms increased by 126,000 in March which is considerably less than 245,000 that it had been expected by economists. The unemployment rate has not changed and has remained at the minimum for 6.5 years - 5.5%.

The pair GBP/USD has grown, breaking through the resistance near 1.4900-1.4920. Earlier the pair fluctuations were in the range, limited by the support near 1.4750-1.4770 and the resistance around 1.4900-1.4920.

The support levels: 1.4880-1.4900 and the resistance levels: 1.5000-1.5020.

The MACD indicator is in a neutral territory.

Trading recommendations

We expect the growth continuation with the first target at the level of 1.5000-1.5020. Further it is likely the upward movement will be continued to the level of 1.5100-1.5120.

Yen

The USD/JPY activity can be called the highest. The price consolidated in the very narrow side corridor, but it finished the session with the US dollar sharp decline. The Japan news showed the services sector business activity index reduction (PMI) in March to 48.4 from the previous 48.5. Similar changes showed the composite indicator which includes the services and manufacturing data, the index fell into the negative territory below 50.0 to 49.4 against the February 50.0.

The US dollar fell sharply against the Japanese yen last Friday after the US unexpectedly weak employment report which pointed out to the new jobs slowdown. The Non Farms rose by 126,000 in March after growth by 264,000 in February. Economists had expected a growth by 248,000.

The pair stopped in the narrow range, trading between the levels of 119.05-119.25 and 120.00-120.20. After the release, has been trading with a decrease and the pair dollar/yen fell below the level of 119.05-119.25.

The support levels: 117.95-118.15, and the resistance levels: 119.05-119.25.

The MACD indicator is in a neutral territory.

Trading recommendations

The current support breakthrough may lead to the pair decline towards 117.95-118.15. The dollar still needs to rise up and consolidate above the 120-th figure for the growth resumption.