The dollar can continue the bearish trend | 22 August 2014

Euro

The traders’ attention will be focused on the Center for Macroeconomic Research Markit Economics PMI index for the manufacturing sector in France and Germany. Even if we see at the data better than the forecasted median - the bulls will not be able to reverse the downward trend.

The euro/dollar has broken through the support level of 1.3330, which led to its decline to 1.3270. The euro fell below the support level of 1.3270 the decline resumed after a rollback to 1.3281.

The support levels are 1.3250- 1.3270, and the resistance levels are 1.3330 - 1.3350.

MACD is in a negative territory.

Trading recommendations

Taking into consideration that the single currency is oversold and there were opened lots of short positions we assume that the support level of 1.3270 will keep the "bears"’ attack. After its loss the pair can fall to 32-th figure.

Pound

The investors are focused on the UK retail sales release. It is worth noting that the leading indicators show mixed trend - the employment growth in Britain and the seasonal sales growth point to yield a positive report. In this case, the wages reduction will act as a deterrent to increase sales in the retail sector.

The pound was limited by the level of 1.6640, after the test which it was again under the pressure. The British currency fell below 1.6640, testing the 1.6570 mark.

The support levels are 1.6550 - 1.6570, and the resistance levels are 1.6640 - 1.6660.

MACD is in a negative territory.

Trading recommendations

Now, the "bears" immediate goal is the level of 1.6570, the loss of which would lead to a reduction to the area of 65th figure. Shall the pound return to the 67th figure we should consider the short positions opening.

Yen

The Japan's trade deficit, which has been kept for 25 consecutive months deprives bears the opportunities for the short positions opening. The Japanese monetary control at its last meeting showed the weak exports in the medium term and we see how this prediction is fulfilled by 100%.

The USD/JPY continues to grow. The dollar have received the additional impulse for the growth after more "hawkish" than the Federal Open Market Federal Reserve last meeting minutes expected publication. As a result, the pair jumped to 103.80 which is currently able to hold back the "bulls"’ attack.

The support levels: 103.15- 103.35, and the resistance levels: 103.80- 104.00.

The MACD indicator is in a positive territory.

Trading recommendations

In the short term the pair may test the resistance at 104.10, where the "bears" can be activated.