EUR/USD: upward impetus has no more power
Current trend
This Thursday the pair EUR/USD was strengthening thanks to the growing demand for Euro. Macroeconomic forecasts for Germany didn’t prove accurate, unemployment claims increased once again. Although German CPI gave Euro some support, the index has risen by 0.2%, exceeding forecasts by 0.1%. European currency is still strengthening, though upward impetus is going to die soon.
After recent crisis in Eurozone residents prefer no tot spend, but to keep money in banks. So EU faces new problem — deflation. To boost up demand ECB is going to lower interest rate to the negative level. European countries are also concerned about high course of Euro that makes it harder to recover economic system.
Today investors’ attention is drawn to the inflation rate and CPI publication in Eurozone. If consumer prices index continues to decrease, the government will most probably prolong soft monetary policy and lower interest rate to the negative level. In USA huge sales start this week, these days American spend a lot and give Dollar support.
Support and resistance
After considerable growth the pair will be corrected and then again go up. In middle-term prospect American currency will be strengthening due to the positive statistics and QE3 program curtailment. The pair EUR/USD will be trading within a range of 1.3620-1.3500 and then fall down to the level of 1.3300, if fundamental data are negative.
Support levels: 1.3560, 1.3500, 1.3420.
Resistance levels: 1.3620, 1.3700, 1.3830.
Trading tips
It is recommended to open sell orders with targets within the range of 1.3520-1.3400.
Dmitriy Likhachev
Analyst of LiteForex Group of Companies
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Forex: Ichimoku Clouds. Review of GBP/USD
GBP/USD, H4
On the four-hour chart Tenkan-sen is above Kijun-sen, the red line is directed upwards, while the blue one remains horizontal. Chinkou Span line is above the price chart, current Kumo is ascending. The closest support level is Tenkan-sen line (1.6324). One of the previous maximums of Chinkou Span line is expected to be a resistance level at 1.6414.
GBP/USD, D1
Let’s look at the daily chart. Tenkan-sen line is above Kijun-sen and they are both directed upwards. Chinkou Span line is above the price chart, current Kumo-cloud is ascending. Tenkan-sen line is the closest support level at 1.6217. One of the previous maximums of Chinkou Span line is expected to be a resistance level at 1.6542.
Key levels
Support levels: 1.6324, 1.6217.
Resistance levels: 1.6414, 1.6542.
Trading tips
Both charts indicate the continuation of the upward trend. Targets for the long positions are 1.6414, 1.6542.
Anastasiya Glushkova
Analyst of LiteForex Group of Companies
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USD/JPY: general analysis
Current trend
On Thursday the pair went up reaching six-month highs at the level of 102.37. Today the Yen continued to lose positions against the American dollar. The rise in the pair USD/JPY is supported by the talk that the Bank of Japan is going to soften monetary policy. Another fact that put pressure on the Japanese currency is the increase of volume of foreign bonds redemption by residents of Japan. Last week the amount reached 1405.6 billion yen, which was by 351.5 billion yen higher than the previous value.
Support and resistance
The nearest resistance level on the daily chart is 102.58 (highs of 24 May). Next resistance line is psychologically important level of 103.00. The target of the “bulls” is the local highs of 103.73. Support level is the local highs of 101.93 and 101.14.
Trading tips
MACD histogram is in the positive zone above the signal line indicating strong uptrend. Stochastic is in the overbought zone. Breakdown of the level of 102.58 will open the way to the level of 103.73 for the “bulls’. It is advisable to place sell orders in case of decline in price below 101.93 with the target of 101.14.
Andrey Cherkas
Analyst of LiteForex Group of Companies
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