EUR/USD Current price: 1.0962
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The dollar edged sharply lower in thin trading and ahead of Friday's holiday, with the EUR/USD pair ending last week at 1.0962, the 61.8% retracement of the 1.1059/1.0802 decline. With another short week ahead, there's even less to expect from financial markets than what they offered last week, as the New Year holiday extends to more countries, and the only relevant data will be the release of the US Consumer confidence and the ECB Monetary Policy Meeting accounts on Thursday. But usually, the market is already on holidays after Christmas, and activity won't resume until early January, with the release of the US Nonfarm Payrolls report.
In the meantime, the common currency is still fighting dollar's strength having recovered above the 1.0880 level, which acted as a strong resistance in the previous days. Nevertheless, the pair is still contained below the 1.1000 level, having been unable to advance beyond it on short lived spikes through it. The 4 hours chart presents a slightly bullish tone, as despite the price is developing above a bullish 20 SMA, the Momentum indicator holds flat right above its 100 level, indicating not enough upward strength at the time being.
Support levels: 1.0955 1.0920 1.0880
Resistance levels: 1.1000 1.1045 1.1090
EUR/JPY Current price: 131.85
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The EUR/JPY pair closed last week flat below the 132.00 level, as both the EUR and the JPY advanced in tandem against the greenback. The dollar was under pressure as commodities recovered strongly before the close, and as investors continued to lock in gains ahead of the year-end, leading to limited moves in the EUR/JPY pair. Technically speaking, the downside is still favored as in the 4 hours chart, the price continued developing below its moving averages, whilst the technical indicators lack directional strength, but hold within negative territory. Renewed selling pressure below the 131.00 level, last week low, is still required to confirm a more sustainable bearish move, down to the 128.40 region.
Support levels: 131.40 130.90 130.50
Resistance levels: 132.15 132.60 133.10
GBP/USD Current price: 1.4922
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After printing a fresh 8-month low of 1.4804 last week, the GBP/USD pair managed to close the week with some modest gains at 1.4922. Despite the recent recovery, the upside potential in term seems limited, as the daily chart shows that the pair is developing well below a bearish 20 SMA, currently in the 1.5040 region while the technical indicators are correcting oversold readings, but still below their mid-lines. Additionally, the price remains below 1.4950, the level where short term sellers have been surging ever since breaking lower a couple of weeks ago. Shorter term, the 4 hours chart points for some advances for this Monday, as the price holds above a horizontal 20 SMA, and the technical indicators stand in positive territory, although partially losing their upward strength.
Support levels: 1.4890 1.4860 1.4825
Resistance levels: 1.4950 1.4985 1.5010
USD/JPY Current price: 120.27
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The USD/JPY pair plummeted to its lowest in two months, but more important, it broke below a daily ascendant trend line coming from 116.13, the low posted on Augusts 24th. The Japanese yen has gained strength after the BOJ announced a series of measures to modify its ongoing monetary stimulus programs, which were far less than what market was expecting. The initial reaction was a rally up to 123.50 in the pair, but it was quickly reversed, and seems poised to continue its way south during the upcoming days, given that in the daily chart the technical indicators present clear bearish slopes below their mid-lines, whilst the price extends below its 100 and 200 DMAs. In the 4 hours chart, the technical indicators have lost their bearish strength, but are still well below their mid-lines, whilst the price holds near its lows, and well below its moving averages, all of which maintains the risk towards the downside, particularly on a break below the 120.00 figure, now the immediate support.
Support levels: 120.00 119.60 119.20
Resistance levels: 120.35 120.70 121.00
AUD/USD Current price: 0.7272
View Live Chart for the AUD/USD
The Australian dollar ended the week with solid gains at 0.7272, supported by a recovery in commodities prices, particularly base metals. The dollar's broad weakness ahead of the holiday was also due to profit taking and position adjustment ahead of the new year, as markets are expected to maintain extreme low volatility these days. Technically, the daily chart shows that the pair remains within its latest range, contained by a symmetrical triangle which should be finally broken towards the downside to confirm a continuation of the long term bearish trend. In the same chart, the pair is slightly above a flat 20 SMA, while the technical indicators aim higher above their mid-lines, in line with further advances. In the 4 hours chart, the 20 SMA has crossed above the 200 EMA and the price remains well above both, while the technical indicators have turned horizontal within positive territory, rather reflecting the latest range than suggesting a bearish move under way.
Support levels: 0.7240 0.7200 0.7165
Resistance levels: 0.7280 0.7330 0.7365
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