Forex Fundamental Analysis: The GBP/USD stays above 1.5260

Euro

The euro rose against its major competitors. The euro rose to 1.1340-1.1360 against the US dollar after falling to the week low of 1.1295. The Germany export sales volume rose by 3.4% m/m in December. The Germany import sales volume fell by 0.8% m/m in December. According to the indices, the Germany trade balance was 21,8V against 17,9V without confirming growth forecasts to 18,3V.

The whole last week the pair euro/dollar consolidated within the range limited by the support around 1.1200-1.1220 and the resistance near 1.1340-1.1360. The euro failed to continue its recovery above the last level.

The support levels are 1.1220-1.1240, and the resistance levels are 1.1340-1.1360.

MACD is in a negative territory.

Trading recommendations

The negative sentiment towards the euro is still preserved and with it the risks of testing and the support breakthrough around 1.1200-1.1220. Should this happen we expect the pair reduction to 1.1100-1.1120. The loss of the last level will open the way to the level of 1.0080-1.1000. However, if the current support is strong, the pair will be able to rise and consolidate above 1.1420-1.1440; the chances of the level 1.1520-1.1540 testing will considerably increase.

Pound

The pound fell against the dollar on the US labor market strong news. The December industrial production forecast is discouraging – in general the industrial production can record + 0.1% m/m, + 0.8% y/y after -0.1% m/m, + 1.1% y/y in November and the manufacturing sector can record + 0.0% m/m, + 2.0% y/y vs. + 0.7% m/m, 2.7% y/y. The bulls managed to return above 1.5020-1.5060 and to test and break through the resistance near the 52nd figure that led to the pair increase to 1.5350-1.5370. The pair failed to consolidate above 1.5280-1.5300 and it closed closer to the support near 1.5200-1.5220.

The support levels: 1.5200-1.5220 and the resistance levels: 1.5280-1.5300.

The MACD indicator is in a positive territory.

Trading recommendations

Now the pound needs to consolidate above 1.5200-1.5220 and then we will be able to assume the level of 1.5280-1.5300 testing. The loss of 52nd figure can return the pair to the support near 1.5020-1.5040.

Yen

The Japanese yen was the more vulnerable currency. The labor report provoked the dollar purchases and the Japanese yen has lost more than 150 points. The December current account surplus showed the surplus reduction- to 187.2 billion against 433.0 billion yen earlier and the trade balance with a solid deficit reduction – to -395.6 billion in December from -636.8 billion yen in the previous period. The pressure on the pair dollar/yen is still preserved. Nevertheless, the pair was able to consolidate above the support near the 117th figure, although the pair growth attempts were limited by the resistance near the 118th. This level was broken through on the strong non farms, leading to the pair growth to the level of 119.25-119.45. After the level testing it rebounded to 117.95-118.15.

The support levels: 117.95-118.15, and the resistance levels: 119.25-119.45.

The MACD indicator is in a positive territory.

Trading recommendations

The strong closing suggests its growth continuation to 120.20-120.40, but the loss of support near 117.95-118.15 will be a wake-up call for the bulls.

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