EUR/USD: the pair is experiencing correction
Current trend
Yesterday the price of the currency pair was growing slowly. Following the speech by Ben Bernanke the pair received additional growth momentum. The head of the US Fed said that situation in the labour market has improved; however it is doubtful that stable economic growth may take place without support from Federal Reserve System. Interest rate is likely to remain at the previous level even after the completion of the assets purchase program. Following these declarations, quotes of the pair EUR/USD have reached three-week highs at the level of 1.3579, and then corrected.
Attention today shall be paid to the US data on retail sales and consumer price index in October, which can provide short-term support to the American currency.
Support and resistance
At the moment market is experiencing correction; the price is moving to support level of 1.3510 (moving average line of “Bollinger bands”). If this level is broken down the price can fall down to the level of 1.3480 and after that the price can reverse and resume upward movement.
On the four-hour chart technical indicators confirm probability of the downward correction. Bollinger bands are directed upward; however the price chart is moving towards the average line of the indicator. MACD histogram is in the overbought zone; it can cross the signal line from top to bottom in the near future, forming a sell signal. Stochastic lines are also crossing, going down and forming a sell signal as well.
Trading tips
In the current conditions it is advisable to open short positions at the current price with the target of 1.3480. Limited sell orders can be placed at the levels of 1.3510 and 1.3480 with the target of 1.3565.
Dmitriy Zolotov
Analyst of LiteForex Group of Companies
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GBP/USD: Pound is growing due to weakening in the USD
Current trend
Last night Ben Bernanke said that he supports policy of Janet Yellen in regard to economic stimulation. According to him it is necessary to make all efforts for full recovery of the US economy. The US Fed believed that the policy of assets purchase shall be continued until stabilization of the employment rate and the decline of inflation.
Support and resistance
On the four-hour chart MACD histogram is in the positive zone below the signal line giving a sell signal. However, Stochastic lines are directed upward and are going to enter overbought zone. The nearest support level is the local lows of 1.6090, which will be followed by the levels of 1.6050 and 1.6000. Resistance levels are 1.6150, 1.6180 and 1.6210.
Trading tips
Fundamental indicators continue to put pressure on the American dollar; therefore the pair is likely to continue growth. Long positions can be opened above the level of 1.6150 with the target of 1.6210.
Ilya Lashenko
Analyst of LiteForex Group of Companies
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USD/CHF: the pair will continue to decline
Current trend
Following bears’ failure to break down resistance level of 0.9240 at the beginning of the month the pair returned to the downward channel. Now the pair USD/CHF is trading below the level of 38.2% (0.9100), Fibonacci retracement, which has been acting as a support level for a few days. If the pair manages to consolidate below this level, the decline can reach the level of 0.9000. Technical indicators also show the decline. Histogram and the signal line of MACD indicator are in the negative zone. The signal line is directed downward being inside the histogram. Stochastic is below the medium level and its both lines are directed downward.
Support and resistance
The nearest resistance level of 0.9100 is the key level of the “bulls.” Breakdown of this level will give them a chance to regain losses. Main support levels of the bears are 0.9075, 0.9050 and 0.9000.
Trading tips
It is advisable to open long positions above the level of 0.9100 with profit taking at the level of 0.9150. Limited orders to sell can be placed at the same level. Short positions are recommended below the level of 0.9075.
Ilya Lashenko
Analyst of LiteForex Group of Companies
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