EUR/USD: looking to buy on dips

EUR/USD Current price: 1.3075

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Dollar advances against most rivals, as risk off and profit taking lead the board this Friday. Early data shown soft Manufacturing PMI prints in France, Germany and the UE, still with a slightly improve from previous readings. Stocks are stuck around opening levels losing early gains, biased lower on US fiscal cliff concerns triggered yesterday. The EUR/USD, despite maintaining the bullish midterm upward tone, looks posed for a downward correction in the short term: the hourly chart shows an increasing bearish momentum as price sets daily lows around 1.3066 after US negative manufacturing and inflation data, with price contained below a broken trend line coming from 1.2886 and below 20 SMA both in the 1.3080/90 area. In the 4 hours chart indicators head lower still in positive territory while 20 SMA stands around 1.3040 converging with yesterday’s low. Below this last, the downside is further expose towards the 1.2970/1.3000 price zone, where buying interest will likely prevail, pushing the pair back higher.

Support levels: 1.3060 1.3040 1.3000 

Resistance levels: 1.3100 1.3135 1.3170

GBP/USD Current price: 1.6117

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Intraday unchanged, the GBP/USD stands at early Asian opening level, having traded in a 40 pips range, still finding some buying interest around 1.6100. The hourly chart shows a slightly bearish tone, as indicators head south nearing their midlines, although price hovers around a flat 20 SMA, which suggest no strength either side of the board at the time being. In the 4 hours chart technical readings stand in neutral territory, but as long as price holds below 1.6130, the downside is favored towards 1.6065, strong static support level.

Support levels: 1.6090 1.6065 1.6025

Resistance levels: 1.6130 1.6170 1.6215 

USD/JPY Current price: 83.54

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The USD/JPY rose to a multi-month high of 83.95, retreating to daily opening levels afterwards. With Japanese elections next Sunday, market is pricing in opposition party lead by Shinzo Abe will win. Abe will have to deal with a country in recession, and he is well known for his ideas of aggressive monetary easing and fiscal stimulus. Risk aversion however weights on the pair that trades at its daily low ahead of the US opening. The hourly chart shows latest slide being mostly corrective, as indicators hold in positive territory and price stands above 83.35 immediate support. Some profit taking ahead of elections may push the pair lower, yet falls  below 82.80 are not expected and approaches to that level will likely be considered as buying opportunities.

Support levels: 83.35 83.05 82.80

Resistance levels: 83.70 84.05 84.40

AUD/USD: Current price: 1.0531

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The AUD/USD maintains a bearish tone in the short term, as the hourly chart shows price fighting a still bearish 20 SMA while momentum and RSI head south right below their midlines. However, buying interest seems to be aligned in the 1.0490/1.0500 area, where we also found a daily ascendant trend line coming from 1.0395, so unless a clear break below, the downside remains limited. In bigger time frames, the upward momentum is also easing although technical readings are far from suggesting a slide. 

Support levels: 1.0510 1.0460 1.0430

Resistance levels: 1.0535 1.0570 1.0620 

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