The EUR/USD dynamics is not clear | 02 May 2014

Euro

The ECB is likely to prefer to wait until the inflation data for May release, only then we can talk about the seasonal fluctuations absence. According to experts' expectations for the foreseeable future, the inflation will remain significantly low. The ECB will have to consider other risks which combined with low inflation will affect the economy.

Earlier data showed that the number of unemployed fell down by 25,000 in April in Germany after 14,000 a month earlier. The unemployment rate remained at 6.7%, as it was expected.

The support levels are 1.3840- 1.3860 and the resistance levels are 1.3910 - 1.3930.

MACD is pointing up, indicating the current uptrend.

Trading Recommendations

The euro has gone to the large range 1.3800-3875 upper boundary, collecting stops below 1.3780. Large volumes went up near 1.3860-3875. The continued growth to 1.3880-3900 is expected. The long positions on 1.3855 updating will probably be opened.

Alternative variant

The 1.3840 support breaking down would cause a correction to the level 1.3800 - 1.3790.

Pound

The “bulls” are getting closer and closer, trying to approach the 69th figure– but there are few prerequisites to gain a foothold at this level. In addition, the high pound rate will have a negative impact on the inflation which is already reduced. Amid this we can expect a smooth decrease during the day.

The support levels are 1.6840 - 1.6860, and the resistance levels are 1.6910 - 1.69300.

MACD is pointing up, indicating the current uptrend.

Trading Recommendations

The pound did not go below 1.6760, showing 1.6900. As the price showed medium-term objective 1.6875, so the next target is 1.7050. The pound shows large volumes with the each maximum update, so long as there are willing to buy expensive, it will continue to rise up. But if the next the maximum volume update does not happen, then a deeper correction may start. In the meantime, it is possible to open the long positions, if the price shows large amounts to 1.6860.

Alternative variant

The price may return to the strong support level and rising trendline 1.6830.

Yen

The dollar/yen is traded near 102 figures and we can expect a moderate demand from the short-term speculators as a long-term trend is up and this looks attractive. The last two months there is ISM index growth and if we see a continued positive trend, the quotes for the pair dollar/yen may recover some lost ground. In general, during the day we can expect the side trend development.

The support levels: 101.50- 101.70, and the resistance levels: 102.23- 102.43.

MACD is at zero area.

Trading Recommendations

The JPY currency is back in 102.00-102.60 - the volumes accumulation zone. The price made the large amounts retest near 102.25-102.35. There are the short positions opening possibility with a stop below 102.65 and 101.85 targets.

Alternative variant

Shall the pair grow it will go towards 102.70 level. A successful consolidation above it will delay the downward scenario.