The pound is reatreating from 1.6020 | 04 November 2014

Euro

The German and the euro zone weak news left investors no other choice but to continue the euro sales. The manufacturing business activity index in Europe was published. The US ISM business activity index, the level of construction costs and the gradual inflation index decrease will be published. The pair was sold on the growth to 1.2730, in result it broke through the support of 1.2660 and fell to the mark of 1.2475, breaking lows at the level of 1.2500.

The support levels are 1.2405-1.2425, and the resistance levels are 1.2500-1.2520.

MACD is in a negative territory.

Trading recommendations

The pair failed to consolidate above 1.2500-1.2520 that proves once more time the downtrend development. The recovery attempts towards 1.2580-1.2600 should be used to open short positions. The growth above this level will weaken the downward pressure.

Pound

The UK and the US business activity index have drawn the investors’ attention. The US strong business activity index can provoke the new dollar sales wave.

The GBP/USD was able to return above the previously tested the support level of 1.5940-1.5960. The pound failed to broke through the resistance level of 1.6040-1.6060. The loss of the support 1.6020-1.6040 led to the pair fall to the level of 1.5940-1.5960 where the pair tried to return above 1.6040-1.6060, but its attempts were unsuccessful.

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

After the level of 1.5940-1.5960 testing there was a rebound above this level where the sale interest was kept. The pound is still under pressure and can be reduced to the lows at the level of 1.5850-1.5870 in the short term. First of all it needs to return above 1.6020-1.6040 and then we can expect the resistance level of 1.6130-1.6150 testing.

Yen

The Japanese yen was mostly affected that had lost 310 points per day. The Japanese Central Bank left interest rates unchanged that was perceived negatively by the investors who expected a more serious action from the regulator, especially taking into consideration the Japanese yen previous losses. The US news now rarely disappoints, so the dollar demand is now increased and not only in the pair with the Japanese yen.

The US dollar with the yen broke through the resistance level of 109.40-109.60 and rose to the level of 111.80-112.00 that provided a resistance for some time. After the unexpected quantitative easing yen sales by the Bank of Japan led to the pair growth to 112.60-112.80, and it rose above the level of 113.75-113.95 at the beginning of the week.

The support levels: 113.55-113.75, and the resistance levels: 114.20-114.40.

The MACD indicator is in a positive territory.

Trading recommendations

The nearest bulls’ target can become the resistance level of 114.20-114.40. The rebounds towards 110.50-108.40 should be used for long positions opening, but the fall below the 108th figure will confirm the downward correction resumption.