The euro downward impulse is exhausted | 08 September 2014

Euro

The EUR/USD showed the biggest decrease for two years, having updated the 14-month low after the ECB unexpectedly cut all three rates and announced the start of non-state purchases and asset-backed securities in the next month. As a result of the euro collapse against the dollar it struck a number of supports, including the level of 1.3030 and fell below the level of 1.2960. The currency pair EUR/USD did not stay in the correction and the price significantly went down. The trading range reached 233 points.

The support levels are 1.2870- 1.2890, and the resistance levels are 1.2960 - 1.2980.

MACD is in a negative territory.

Trading recommendations

The pair consolidated before the United States labor market release which may substantially affect the pair dynamics. Nevertheless, the possible bounce in the level of 1.3030 direction should be used to open the short positions. The immediate bears’ target is the support around 1.2890.

Pound

There has been the pound decline against the dollar. The sterling has fallen amid the USA strong data which was the ECB meeting result. The Britain Monetary regulator left the refinancing rate unchanged. It is now at 0.5%, and the program purchase bonds is 375 billion. pounds. However, the ECB statement had a slight pressure on the "cable". Its decline against the dollar increased after the ECB release and its Chairman's statement. The GBP/USD continued to fall, breaking support at 1.6430 and falling to 1.6300.

The support levels are 1.6280 - 1.6300, and the resistance levels are 1.6370 - 1.6390.

MACD is in a negative territory.

Trading recommendations

The negative sentiment still persists, but the pound oversold increases the correction above risk. Perhaps the reason for it will be the non-farms. In this case, the pound is likely to bounce to 1.6430, where it should consider the short positions opening.

Yen

News about the European Central Bank decisions on their monetary policies significantly influenced the pair USD/JPY situation. Rather, in this case, the supporting point for the "greenback" was the USA economy news that showed the good results and the United States Treasuries growth. We expect the United States labor market release which may significantly impact the pair dynamics. The dollar/yen is likely to be in a consolidation before the American session. The dollar/yen rose above 105.00, and in the Asian session - up to 105.50. After testing the level it retreated to 105.00.

The support levels: 104.80- 105.00, and the resistance levels: 105.50- 105.70.

The MACD indicator is in a positive territory.

Trading recommendations

The dollar needs to consolidate above the 105th figure to continue the growth. Its loss can weaken the "bullish" impulse and lead to the reduction to 104.70 and 104.20.