The dollar is expected to keep strengthening

Euro

The dollar is believed to keep growing

The dollar decreased against the euro during yesterday’s trading session. Earlier the euro fell sharply against the US dollar. The block industrial production can show a slight recovery due to France and Italy’s industrial production increase expectations.The EU countries’ inflation rates will continue to note the weakness of the region’s price pressures. The pair tested the support near 1.2250-1.2270 that could hold back bears. Hence there was an attempt to develop an upward correction and the pair tested the resistance level of 1.2350-1.2370.

The support levels are 1.2250-1.2270, and the resistance levels are 1.2350-1.2370.

MACD is in a negative territory.

Trading recommendations

The week opened under the resistance levels of 1.2350-1.2370,  support tests around 1.2250-1.2270 in the short term. Breaking through here will open the way to the lows seen in 2012 at level of around 1.2040.

Pound

The dollar is believed to keep growing

The pound could rise against the dollar. Earlier the US labor market report sharply increased the pressure on the pound and the GBPUSD pair not only decreased, but also broke through the consolidation range support where it was the last two weeks. The UK news will include industrial production data in October. It is forecasted that the trade balance deficit decrease to 9.5 billion with 9.8 billion pounds in October.

The pair managed to develop an upward correction this week. Earlier, the GBPUSD was restrained by resistance near 1.5766. Then peaks became lower and lower, but the pair finished last week with a decrease to the level of 1.5530-1.5550. The resistance level moved to 1.5650-1.5670 yesterday.

The support levels are 1.5580-1.5600, and the resistance levels are 1.5650 – 1.5670.

MACD is in a negative territory.

Trading recommendations

It suggests testing support around the 55-figure in the short term. The pair is undervalued which increases the correction continuation risk, but this should not be an obstacle for the further decline.

Yen

The dollar is believed to keep growing

The pair USD/JPY corrected from the new local highs. The Japan clarifying GDP assessment for the third quarter indicated an even greater economic reduction than previously reported, -1.9% q/q at -1.6% q/q published after the initial calculation. The trade balance for October, -766.6 billion yen after 714.5 billion yen when we considered the deficit reduction to -569.6 billion yen.

The pair broke through the psychologically important level of 120.00 last week and rose to the level of 121.85. It should be noted that 120.00 was broken through without much effort that confirms that the uptrend is in the active phase. Nevertheless the pair decreased to the support level of 120.00-120.20.

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 next bulls’ target can be the resistance near 122.40-122.60, but the pair is heavily overvalued that can slow down its further movement above. We keep a close eye on the dollar ability to consolidate above 120.00-120.20 in the case of correction to this support.

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