The Euro Zone business activity slowed down | 25 September 2014

Euro

The consumer confidence in the euro area shows a decline that does not add any optimism. Against this negative background, we can expect the data release on the level of the forecasted medians. As for the US new housing sales - we can expect the data release that is slightly worse than the forecasted medians which will influence the US dollar. The oversold EUR/USD did not stop its decline and the pair is trading below the level of 1.2800-1.2820. Euro was unable to break through the resistance level at 1.2890, and then came under pressure and fell below the support level.

The support levels are 1.2710 - 1.2730, and the resistance levels are 1.2800 - 1.2820.

MACD is in a negative territory.

Trading recommendations

The pair could not remain within the range. The confident resistance level of 1.2890 break upward opens the way to the level of 1.2960.

Pound

The GBP/USD is trading in a side channel amid the US published interesting releases absence. We do not expect macroeconomic reports from Britain.

On the eve we again observed sales on the leading stock markets, that indicates the demand absence for the risky assets. In this regard, it will be difficult for the bulls to move the top quotes, despite the US possible moderately negative macroeconomic data on the new home sales. The GBP/USD fell under the support level of 1.6370. Before the pair was sold off and it rose.

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

For easing the downward pressure pound needs to overcome the upper limit. In this case, we should expect its growth to the current high – the level of 1.6450. The support breakthrough will open the way to the figure 62.

Yen

The dollar/yen should expect the side trend development. Currently there are no "drivers" for a strong dollar strengthening, however, the bulls started s technical correction that does not allow the bears to push the price below figure 108.00-108.20. The US and Japan stock markets have an impact the USD/JPY. The USD/JPY continues to consolidate after rising to 109.45. The bulls can not go back and consolidate above the figure 109 and there are unsuccessful bearish attempts to develop downward correction as the dollar on the fall towards 108.40-108.20 continues to be oversold.

The support levels: 108.50-108.70, and the resistance levels: 109.20-109.40.

The MACD indicator is in a positive territory.

Trading recommendations

The inability to overcome the resistance level of 109.20-109.40 leads to the rate decline to 108.20-108.00. In case of the resistance level of 109.20-109.40 break upwards we expect the level of 110.00 testing, where the bears’ activation is possible.