The dollar keeps strenghthening its positions | 19 September 2014

Euro

The investors are not pleased by the Eurozone this week releases. The Bond Market also points to bearish trend efforts - the 10-year American and German bonds profitability differential is again expanding and the bears found themselves in favorable situation. After the Committee's meeting results on the FOMC operations and Janet Yellen’s comments, that led to the pair euro/dollar sale off and fell below the support level of 1.2890. Nevertheless, the pair recovered its losses.

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 attempts to achieve new highs should be limited to the resistance level of 1.2960-1.2980. The rise above this level will weaken the bearish impulse. The euro is still oversold.

Pound

The Scotland referendum results and the Britain August retail sales release are in the investors’ attention. The leading indicators show a moderately positive background - reducing unemployment and the wages increase that is positive for the retail sector. However, the UK August retail sales are reduced and against this background we can count on the release data at the level of the forecasted medians. The GBP/USD was sold at the level of 1.6358 which led to the rate fall to 1.6200. Then pound rose to 1.6370 on the Scotland survey results.

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

MACD is in a positive territory.

Trading recommendations

The main negative factor for the pound is the possible Scotland separation from the UK, the pound decrease will be more extensive. If the country remains a part of the UK, the pound will be able to play out a large part of the current losses, but it is impossible to predict its recovery extent. It is recommended to stay out of the market.

Yen

The attention is directed towards the August trade balance. The orders increase for the machinery and the equipment with the business settings index rise BSI for the large manufacturers indicate an increase in the goods production. The head of the US Federal Reserve Janet Yellen commented that the pair dollar/yen continued to grow and broke through the resistance level of 108.20. It led to the upward impulse increase and led to the pair growth to the level of 108.70.

The support levels: 108.00-108.20, and the resistance levels: 108.70-108.90.

The MACD indicator is in a positive territory.

Trading recommendations

The dollar upward trend is in the active phase, and the dollar rate may reach the psychological level of 110.00. However, the dollar is showing strong overbought signs which increases the correction risk.