The USD/JPY can retest its highs | 07 Oktober 2014

Euro

The euro is increasing against the US dollar at the beginning of the week. The bearish trend reinforced after the US labor report and in this regard bulls had very little chances for the corrective movement development last week. The unemployment fell below 6% in the United States and now traders are expected the FOMC comments regarding the monetary policy tightening. The euro/dollar situation remains tense and the pair perspectives are unclear. The pair rate fell to 1.2500. There the price rebound upwards and overcame the resistance level of 1.2580. The euro/dollar is heavily oversold, therefore the correction increase risks are rising above.

The support levels are 1.2560 - 1.2580, and the resistance levels are 1.2660 - 1.2680.

MACD is in a negative territory.

Trading recommendations

The rise above the level of 1.2660-1.2680 will weaken the downward pressure to some extent. The new bulls’ target can become the resistance level of 1.2730.

Pound

The pound had slightly increased on the Monday trades. According to the PMI manufacturing and service sector index, the negative macroeconomic statistics has lowered the pound rate to the minimum for the last 10 months last week. Amid the US labor market positive macroeconomic releases we can expect the downward trend continuation within the British currency. The UK economic growth rate is more modest that will only strengthen the bearish trend in the short term.

The British pound stopped its decrease. The recovery attempt was stopped above the level of 1.6040. The pound/dollar is oversold which increases the upward correction continuation risks.

The support levels are 1.5940 - 1.5960, and the resistance levels are 1.6040 - 1.6060.

MACD is in a negative territory.

Trading recommendations

Bulls will have to overcome the resistance at the level of 1.6130 and the resistance level of 1.6200. The growth above the last level will weaken the bearish pressure.

Yen

Traders stopped to buy the pair dollar/yen. Following the American stock indexes the Japanese stock index Nikkei 225 will also rise up which is a positive factor for the dollar/yen. The US labor market release came out much better than the forecasted medians which confirm the strong economic growth in the last two quarters. The pair fell below the level of 109.40. In is worth noting that earlier the resistance was broken through after the US labor market data and the pair has returned to the 110th figure. The pair didn’t manage its growth especially to rise up above this level that may signal the top formation and the downward correction continuation.

The support levels: 108.50-108.70, and the resistance levels: 109.40-109.60.

The MACD indicator is in a neutral territory.

Trading recommendations

In case of the support level of 108.50-108.70 breakdown we can expect the pair decline to 108.70, the loss of this level will lead to a drop to 107.80-108.00.