The euro is weakening amid weak PMI | 08 April 2015

Euro

The euro spent the previous session in the multidirectional trade against the dollar and closed the day with a decrease. According to the forecasts, the Eurozone Producer Price Index (PPI) slightly increased + 0.4% m/m, -2.9% y/y in February against -0.9% m/m, -3.4% y/y in January, indicating the possible inflation growth.

The pair euro/dollar slowly reached the resistance near 1.1000-1.1020 where it was rebounded to the support near 1.0880-1.0900. This support level was broken.

The support levels are 1.0750-1.0770, and the resistance levels are 1.0900-1.0920.

MACD is in a neutral territory.

Trading recommendations

The euro inability to consolidate above 1.1000-1.1020 lowers the upward correction continuation chances. However, while the pair is trading above the 1.0750-1.0770, the chances will be preserved.

Pound

At the beginning of the previous trading session the pound increased and by the end of the session decreased and closed the day with losses. Activity in the services sector which accounts for almost 80% of the UK economy accelerated in March and the PMI index showed the renewed rise after the February decline- the index increased by 58.9 against the previous 56.7 while it was expected a growth by only 57.0.

Another bulls’ attempt to break through the psychological level of 1.5000-1.5020 was unsuccessful. The pair was sold on the growth and it decreased below the support near 1.4880-1.4900.

The support levels: 1.4750-1.4770 and the resistance levels: 1.4900-1.4920.

The MACD indicator is in a positive territory.

Trading recommendations

Thus, the risks of the consolidation phase completion with the further decline towards 1.4500 are still preserved. The growth and ability to consolidate above 1.5000-1.5020 will open the way towards the 52nd figure.

Yen

The Japanese yen fell against the dollar and returned to the US dollar almost all the Friday gains, acquired amid the US employment indicators weakness. The Nikkei stock index is trading with a growth by 0.77% to 19547.00 points. International reserves were published in Japan which in March amounted 1.245,3V against the earlier 1.251,1V. Since the beginning of the new trading week the pair USD/JPY has been trading in the tight range within the 119th figure. Then the pair was bought off that led to its growth to the resistance around 120.20-120.40 which was broken through.

The support levels: 120.00-120.20, and the resistance levels: 121.30-121.50.

The MACD indicator is in a positive territory.

Trading recommendations

The bears’ inability to maintain control over the situation after the US weak employment report is a positive factor for the dollar, but it still needs to rise up and consolidate above the 120-th figure for its growth resumption. Until then, the downside risks will be preserved.