The pound will be under pressure till the UK elections | 31 March 2015

Euro

The euro held the range trades but closed against the dollar with a decrease. The European Commission report will be about the European business sentiment and the German inflation data in the center of our attention. The euro zone economic sentiment index rose to 103.9 from 102.3 in March. The pair EUR/USD continued its correction, having grown to the resistance around 1.1000-1.1020. There is preserved interest for sales, the pair tested the level of 1.1000-1.1020 and declined below the support near 1.0880-1.0900. It is possible that the upward correction has ended and the pair can resume its decrease that will depend on the bears’ ability to break through the support near 1.0750-1.0770.

The support levels are 1.0750-1.0770, and the resistance levels are 1.0900-1.0920.

MACD is in a neutral territory.

Trading recommendations

The pair can stay in the range between 1.0770-1.1000 before the US labor market publication till the end of the week and after the data output it may breakthrough in one or another direction. The loss of 1.0750-1.0770 will open the way towards 1.0610-1.0630, but the confident level of 1.1000-1.1020 breakthrough will lead towards 1.1120-1.1140.

Pound

Starting with a decrease amid the US reports about the house prices growth slowdown, the pound has grown against the dollar, supported by the Bank of England statements as well as by the US economic messages that turned out to be weaker than expected. According to the latest publications, the number of mortgage claims rose to 61,760 from 60,707 in February and the consumer credit volume came out 2.5 billion pounds from 2.4 billion pounds. The bulls tried to break through the resistance around the psychological level of 1.4900-1.4920, but their attempts were unsuccessful and with the pair cross-rate downward fluctuations were limited by the support near 1.4750-1.4770.

The support levels: 1.4750-1.4770 and the resistance levels: 1.4900-1.4920.

The MACD indicator is in a neutral territory.

Trading recommendations

It is obvious that the pound needs to break through the upper or lower range limit for the growth continuation and a decrease resumption. Its inability to rise up and consolidate above 1.5000-1.5020 increases the risk of negative scenario. The loss of the support level of 1.4750-1.4770 will lead to a decrease towards 1.4680-1.4700.

Yen

The pair was traded in the side consolidation and then sharply grew. The Japanese economic data triggered a slight increase, but the "Treasuries" bond yields slight decrease and insufficiently strong US economic indicators have allowed "bears" to level the losses. We received the February industrial production volume report – the output declined on the month basis by 3.4% m/m and improved slightly on the annual basis to -2.6% y/y after a 3.7% m/m, -2.8% y/y in January that pushes to doubts about the activity index growth that is expected with forecasts in the 1st quarter.

Being under pressure, the US dollar fell to the support near 118.15-118.35 and after the level testing the pair was able to recover to the level of 119.25-119.45. After a consolidation the pair grew to the resistance level of 120.20-120.40.

The support levels: 119.05-119.25, and the resistance levels: 120.20-120.40.

The MACD indicator is in a neutral territory.

Trading recommendations

While the pair is trading above 118.15-118.35, the re-growth chances will be preserved, but the dollar inability to consolidate above the 120th figure is alarming for the bulls. The loss of the support level of 119.05-119.25 will lead to a decrease towards 117.95-118.15. The latter level breakthrough will open the way to 116th figure.