We expect a long EUR/USD decrease | 11 Juli 2014

Euro

The euro fell against the U.S. dollar, trading around week low levels after the disappointing report on the German industrial orders, while European Central Bank President Mario Draghi comments continue to exert pressure.

ECB President Mario Draghi reiterated the bank forecasts that rates would remain at current or lower levels in the long term. He highlighted that "the governing council also unanimous in their commitment to the non-traditional instruments use if necessary, to fight the too long low inflation period risk."

Trading recommendations

We advise to consider the short positions with the first target - 1.3535. When the price consolidates below the first target it will go to the level of 1.3480.

Pound

Experts do not see that the British economy is overheated, despite the rapid growth. According to the BoE chief economist Andrew Heldeyn the UK economy show little overheating signals which could require the immediate increase in the base rate within the inflation control. He stressed that inflation and wage growth were restrained. With continued strong economic recovery the UK Monetary Policy Committee of the Bank of England is going to raise interest rates from a record low level of 0.5%. The market participants expect that this will happen at the end of this year or early in 2015

Trading recommendations

We advise to consider the long positions with the first target - 1.7070. When the price consolidates above the first target it will go to the level of 1.7240.

Yen

The market strengthened expectations that the USD/JPY still is able to get out of the narrow range in which it came at the beginning of the year, and the reason can serve as a qualitative change in the chosen monetary policy course of the U.S. Federal Reserve Bank and Japan. In the first case, an important factor is the growth in the second - inflationary expectations.

Trading recommendations

We advise to consider the short positions with the first target 101.70. When the price consolidates below the first target it may go to the level of 101.30.