EUR/USD: no clear picture yet

EUR/USD Current Price: 1.0832

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The American dollar closed last Friday broadly higher against most of its major rivals, although gains were not enough to erase its previous losses in most of the cases. The trigger for dollar's rally was the Bank of Japan, as the Central Bank introduced negative rates, announcing of a -0.10% interest rate on current accounts that financial institutions hold at the BOJ. Also helping the greenback was the release of the US Q4 advanced GDP data, with a small downside surprise, as it showed a 0.7% growth against the 0.8% expected. The slowdown in the US by the end of 2015 was already anticipated by the FED last Wednesday, and it seems that market's players had priced in an even lower reading ahead of the release, given that the currency gained sharply after the announcement. The rally stalled with the release of the final Michigan sentiment index that declined to 92.0 during January.

The EUR/USD pair closed the week at 1.0832 after being rejected by a daily descendant trend line in an advance up to 1.0967, a zone in where the pair had met selling interest several times over the past January. Holding near the base of its range, the pair continues lacking long term definitions, as it has been trapped for over a month in a 200 pips' range. Short term the 4 hours chart maintains the risk towards the downside, given that the technical indicators are standing below their mid-lines, and the price below the moving averages. The immediate resistance for this Monday comes at 1.0845, a Fibonacci level, while the main support is the 1.0770/800 region.

Support levels: 1.0810 1.0770 1.0730 

Resistance levels: 1.0845 1.0890 1.0925

EUR/JPY Current price: 131.14

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The EUR/JPY advanced up to 132.27, establishing there a monthly high, as the Japanese Yen plummeted during the Asian session following BOJ's decision to introduce “quantitative and qualitative monetary easing with a negative interest rate.” The cross jumped over 200 pips after the news, but gave up ground later in the day on EUR weakness, ending the day right above the 131.00 level. From a technical point of view, the 1 hour chart shows that the technical indicators retreated from overbought levels and entered negative territory where they stand, holding anyway above its moving averages. In the 4 hours chart, the Momentum indicator heads lower from overbought readings, but remains well above its mid-line at the time being, while the RSI indicator stands around 66. Should the price ease below the 131.00 level, the risk will turn towards the downside with buyers probably surging 100 pips lower, around the key 130.00 figure. 

Support levels: 131.00 131.55 130.10 

Resistance levels: 131.40 131.85 132.30

GBP/USD Current price: 1.4249

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The GBP/USD pair closed the week flat around 1.4250, having set a high of 1.4412 earlier this week. The Pound however, was unable to hold to early week gains as the background weakness remains firm in place, as expectations of a UK rate hike have been steadily decreasing since late 2015. During this upcoming days, the BOE will have its monthly economic policy meeting, expected to remain as a non-event, particularly after BOE Governor, Mark Carney, said that “now is not yet the time to raise interest rates.”  The pair started the week with a positive tone, but gains where moderated by the negative sentiment towards the British currency that is set to extend this February. Anyway, and from a technical point of view, the downward potential has grown  after the pair broke below a daily ascendant trend line, currently offering an immediate short term resistance at 1.4280. Should the pair complete a pullback to the level, but fail to extend above it, the downward potential will increase. In the 4 hours chart the technical indicators have bounced from oversold readings but remain within negative territory while the 20 SMA holds around 1.4310, capping the upside.

Support levels: 1.4220 1.4180 1.4135

Resistance levels: 1.4280 1.4310 1.4360 

USD/JPY Current price: 121.06

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The USD/JPY pair soared  during the Asian session, establishing a fresh monthly high of 121.68, underpinned by a JPY sell-off after the BOJ announced fresh stimulus measures. The Bank of Japan not only cut to -0.10% the interbank rate, but also cut its  inflation forecast for the fiscal year that begins April 1 to 0.8% from 1.4%. Also, it pushed out to the beginning of the 2017 fiscal year the date when it will reach its 2% inflation target. The pair surged almost 300 pips, and held to most of its gains by the end of the day, closing the week at 121.06. The short term technical picture suggests some consolidation ahead, given that the technical indicators in the 1 hour chart have retreated sharply from overbought levels, but the price remained near its highs.  In the 4 hours chart the technical indicators are giving signs of upward exhaustion in extreme overbought territory, yet remain far from suggesting a downward movement, in line with the shorter term perspective. The pair has advanced beyond the 61.8% retracement of the latest daily fall around 120.60. As long as the level holds, bulls will retain control of the pair, with a break above 121.70 opening doors for an advance up to the 123.50 region where the pair will complete a 100% retracement. 

Support levels: 120.60 120.15 119.70

Resistance levels: 121.30 121.70 122.10

AUD/USD Current price: 0.7078

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The Australian dollar enjoyed of firm demand for most of the week, mostly due to oil's recovery. After trading near $26.00 a barrel in the previous week, the black gold surged to near$35.00 a barrel, with both, Brent and WTI ending the week firmly above 30.00. Crude surged on speculation OPEC and non-OPEC oil producers will come to a deal to cut production, albeit the news was later denied. Prices fell, but hold into gains for the week afterwards. As for the Aussie, it will be a big week the upcoming one, as the RBA will have its economic policy meeting, alongside with the release of key macroeconomic indicators, including the latest Manufacturing PMI. The pair traded as high as 0.7140 last Friday, ending the week at 0.7078, around the 50% retracement of its latest daily decline. For this Monday, the pair retains a  positive tone, as in the 4 hours chart, the price has managed to hold above a horizontal 200 EMA, currently around 0.7060, while the 20 SMA has steadily advance, now holding a handful of pips below that level. In the same chart, the technical indicators have retreated from overbought readings, but held above their mid-lines and are now turning higher, in line with some further gains, particularly on a recovery above, 0.7100. 

Support levels: 0.7060 0.7020 0.6980

Resistance levels: 0.7105 0.7150 0.7190