Services ISM shows better results than expected | 07 May 2014

Eurо

Pay attention to the retail trade in the euro area in March. In the first month of spring the inflationary pressure indicator CPI fell down to 0.5%, which is a negative factor for the retail sector. In the light of this we can expect the output data at the median forecasts which will provide some support for the “bears”. The strong euro/dollar decrease should not be counted - and before the ECB meeting the investors will take a wait and look at the position.

The support levels are 1.3890- 1.3910, and the resistance levels are 1.3960 - 1.3990.

MACD is pointing up, indicating the current uptrend movement rates.

Trading Recommendations

The situation remains the same: a break through 1.3905 will open the way to the highs at 1.3966. After its breaking the price might go to 1.4000. On the other hand its falling below 1.3800-1.3772 shall weaken the “bullish” impulse and shall give a reason to for new high formation.

Pound

The Markit Economics published the third UK PMI index for the services sector. Economy of the United Kingdom shows a moderate pace of economic growth and we can expect the release on the level of the median forecasts that will not support the British currency. In addition, the high rate of the pound is negative for the economic growth and there are no preconditions for securing 69 per figure now.

Like the euro/dollar the pair is growing. The pair is approaching the 70th figure, but it is not clear, if it is the beginning of a new movement or the pair is going into a different range.

The support levels are 1.6880 - 1.6910, and the resistance levels are 1.6980 - 1.7000.

MACD is pointing up, indicating the current uptrend movement rates.

Trading Recommendations

The situation remains the same: the persistence of the “bulls” can lead to 1.7000 testing, it is a psychological level, but MACD doubts its ability to move much higher than the current levels.

Yen

Japanese investors returned to the market after the holidays and we can expect volatility spike in the Asian trading session. Japan did not please the investors with the publication of an important macroeconomic statistics and should follow the world's leading stock markets dynamics. If the demand for risky assets grows we expect the “bulls” activity.

The support levels: 101.50- 101.70, and the resistance levels: 102.10- 102.30.

MACD is pointing down, indicating the current downtrend movement rates.

Trading Recommendations

The USD/JPY started the day with falling to 101.60. The pair was falling the whole day and ended the day at the reached level. The risks of 101.59-101.22 testing are preserved.

To loosen the “bear” pressure the “bulls” need to overcome the 103rd figure and consolidate above it. In this case, they can count on 104th testing.