Analysis: The pound keeps staying in an upward channel

Euro

The European currency tries to recover the last week losses. The euro negative sentiment points out to the current month values testing in the short future. The Germany and the US bond yields are again expanding again that with the dollar index basket increase (USDX), confirms the stable bearish trend existence.

The Ifo German Institute report is in the centre of our attention, should the forecasts not promise the positive euro results – the November business sentiment index is expected to decrease to 103.0 from 103.2, the index of current conditions with the fall to 108.1 from 108.4. The euro/dollar consolidated and the fell to the fresh lows at the level of 1.2358. The euro is trying to develop its recovery.

The support levels are 1.2405-1.2425, and the resistance levels are 1.2500-1.2520.

MACD is in a negative territory.

Trading recommendations

The resistance breakthrough risks are increasing. The further downward trend development towards 1.2261-1.2042 is possible.

Pound

The US and the UK important macroeconomic releases will be published on Tuesday and Wednesday, and in this regard, traders will take a “wait and see” position. The Gilts and Treasuries negative bond yields expansion is a bearish factor for the pair GBP/USD and will restrain traders from the active buying. The GBP/USD is rising after short-term consolidation, trading in the range, limited by the support level of 1.5630-1.5650 and the resistance level of 1.5730-15750.

The support levels are 1.5630-1.5650, and the resistance levels are 1.5730 – 1.5750.

MACD is in a neutral territory.

Trading recommendations

The forecast remains negative, the pair can fall towards 1.5580-1.5600 in the medium and long term. There are possible rebounds upwards in the short term.

Yen

Despite the quite high number of “longs” – the pair dollar/yen continues to enjoy the steady demand from the investors’ part. Today in the absence of important macroeconomic statistics publication the traders’ attention will be focused on the bond and stock markets dynamics. Both markets signal about the upward trend continuation and in this regard it is most effective to build long positions on the lows. The last week was successful for the pair dollar/yen. Its growth continued, as a result there was tested the new high at the level of 118.95. There was marked the profit fixation on the long positions that led to the pair decrease to 117.35. The pair increased above the level of 117.95-118.15.

The support levels: 117.95-118.15, and the resistance levels: 119.20-119.40.

The MACD indicator is in a positive territory.

Trading recommendations

In general, the uptrend is still in force and the dollar can test the psychological level of 120.00.