EUR/USD: Attention shifts to Chinese GDP

EUR/USD Current Price: 1.0891

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The EUR/USD pair wavered around the 1.0900 level this Monday, unable to find direction as, following an empty calendar during the European session, US markets remained closed on holidays, in observance of the Martin Luther King day.  Still, risk aversion continued dominating the financial world, this time, triggered by Iran as during the weekend, international sanctions over Iran were lifted, and now the country will be able to add as much as 500,000 barrels a day to crude exports, sending the commodity down to fresh 12-year lows. Also in the spotlight is the upcoming ECB meeting later this week, with market's expectations pointing to a dovish stance from Mr. Draghi, as the Central Bank measures are still unable to revive the local economy. 

Technically, the pair maintains quite a neutral stance, as the 4 hours chart shows that the 20,100 and 200 SMA's converge in a 10-pips range, whilst the technical indicators moved back and forth around their mid-lines ever since the day started. Pretty much, the EUR/USD pair has lacked directional strength ever since the upward rally triggered by the ECB earlier December, with a decline down to 1.0700 having been quickly corrected higher. Sellers are still surging around the 1.1000 figure, although 1.1060 is still the level to break to confirm a more sustainable bullish continuation, while the line in the sand towards the downside comes at 1.0800, where buying interest has been surging for most of these last two weeks. 

Support levels: 1.0845 1.0800 1.0760

Resistance levels: 1.0925 1.0965 1.1000 

EUR/JPY Current price: 127.83

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The EUR/JPY pair added some 20 pips this Monday, but not before posting a lower low daily basis at 127.33.  The Japanese yen was generally lower across the board after BoJ's Governor Kuroda repeated that the domestic economy is likely to continue recovering at a moderate pace, whilst reiterating that aggressive easing is still on the cards to achieve and maintain its 2% inflation target. Anyway, the common currency failed to attract buying interest leaving the pair confined in a tight intraday range. Technically and for the short term, the 1 hour chart shows that the 100 and 200 SMAs converge around the 128.00 level, acting as an immediate dynamic resistance, although the technical indicators aim slightly higher above their mid-lines. In the 4 hours chart, however, the upside remains quite limited, given that the technical indicators lack directional strength around their mid-lines, whilst the price continues developing far below a sharply bearish 100 SMA. 

Support levels: 127.30 126.75 126.20

Resistance levels: 128.00 128.55 129.00

GBP/USD Current price: 1.4257

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The British Pound attempted to correct higher against its American rival this Monday, but failed miserably to sustain gains, and trades a handful of pips above a fresh multi-year low established at 1.4247 during the European session. A minor housing report released earlier in the day showed that  the Rightmove house price index improved in January, up to 0.5% from a previous -1.1%. But concerns over a possible Brexit and concerns over an economic setback in the UK are keeping the Pound under pressure. The rally seems way overextended, considering that the pair has fallen for three weeks in a row, with almost no upward corrective movements in between, yet the technical readings are still favoring the downside as there are no signs the pair will change course any time soon. The 20 SMA in the 4 hours chart has been the main resistance ever since late December, and approaches to it have resulted in renewed selling interest sending prices to new lows, and is currently around 1.4350, the level to break now to confirm an upward corrective move. Nevertheless, the technical indicators in the same time frame have turned back south near oversold readings after a limited upward corrective movement, maintaining the risk towards the downside. A break below 1.4220, May 2010 low and the immediate support, should only fuel the slide and favor an approach to the 1.4100 figure for later this week. 

Support levels: 1.4220 1.4185 1.4140

Resistance levels: 1.4295 1.4350 1.4390

USD/JPY Current price: 117.33

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The dollar edged higher against the yen during Asia trade this Monday, following a recovery in Tokyo stocks from a fresh 1-year low. The safe haven currency was also affected by BOJ's Kuroda wording, as the Central Bank's head reaffirmed that they are willing to add more easing in order to achieve the 2.0% inflation target. The dollar held to its intraday gains, with the USD/JPY ending the day around 117.30, a handful of pips below the daily high set a 117.43. Nor Japan, neither the US, will release relevant macro data this Tuesday, which means that the pair can continue trading on sentiment, and the main trigger will be Chinese GDP for the Q4, to be released during the upcoming Asian session. If the number misses expectations the yen and the gold, are likely to gain on their safe haven condition. Technically, the pair maintains its negative tone, as in the 1 hour chart, the price develops well below its 100 and 200 SMAs, while the technical indicators lack directional strength within neutral territory. In the 4 hours chart, the technical indicators have turned sharply lower after failing to overcome their mid-lines, as the price continues developing well below a strongly bearish 100 SMA, supporting the shorter term view and favoring a new leg south for this Tuesday.  

Support levels: 116.90 116.50 116.10 

Resistance levels: 117.40 117.75 118.10

AUD/USD Current price: 0.6857

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The Aussie enjoyed from some temporal demand at the beginning of the week, helped by a private gauge of inflation in Australia, which showed an advance in prices in December, up to 2.0% yearly basis compared to a previous estimate of 1.8%. The AUD/USD pair advanced up to 0.6927 before retreating on broad dollar's strength during the European and American sessions, and trades now near its recent lows having erased all of its intraday gains. The upcoming direction for the pair will depend on the result of the Chinese Q4 GDP result, expected at 1.7% QoQ and at 6.8% YoY. A better-than-expected outcome can see the pair advancing up to the 0.7000 psychological figure, yet bad numbers should lead to a break below 0.6826, last week low. Technically speaking the downside is still favored given that in the 4 hours chart, the price has accelerated below a bearish 20 SMA, while the technical indicators head sharply lower below their mid-lines, after failing to gain positive territory. 

Support levels: 0.6825 0.6780 0.6735 

Resistance levels: 0.6905 0.6960 0.7000