EUR/USD: downward correction can extend to 1.1160

EUR/USD Current Price: 1.1275

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The EUR/USD pair plummeted to a fresh 2-week low of 1.1271, and stays nearby at the end of the day, with the dollar buoyed amid a sudden recovery in risk appetite. Chinese data released overnight lifted hopes that the economy is finally stabilizing, as exports, in USD terms, rose by 11.5% in March whilst exports fell less-than-expected, down by 7.6%, resulting in a trade surplus of $29.86B, down from $32.59B in February. Asian equities soared, with European and American indexes following the lead. Safe-haven assets suffered the most, whilst commodities also dropped on the back of oil's slide, all of which supported the greenback's rally. 

In the data front, Industrial production in the EU declined by 0.8% in February, while January’s growth was revised down to 1.9%, weighing on the common currency. As for the US, data also disappointed, with retail sales unexpectedly falling in March by 0.3% and the Producer Price Index for final demand down by 0.1%. 

The pair now trades below the base of its previous range, where selling interest capped the recovery that followed US poor macro releases, indicating that the decline may extend further during the upcoming sessions, although the possible extension of this current bearish correction is not yet clear. So far, the 4 hours chart supports some additional declines, as the technical indicators have barely lost downward strength near oversold territory, whilst the price develops now well below a mild bearish 20 SMA. The immediate support comes at 1.1245, and a break below it could see the pair extending its decline down to 1.1120/60, a major support region, in where buying interest should resume to deny a longer lasting decline. 

Support levels: 1.1245 1.1200 1.1160

Resistance levels: 1.1335 1.1380 1.1420 

 

EUR/JPY Current price: 123.24

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The EUR/JPY pair turned back south this Wednesday, as the common currency under-performed against all of its major rivals, although with the JPY also weak, the pair remained within its recent range. A change in market's mood after positive data coming from China spooked fears of a global economic slowdown, led the way, in spite of macroeconomic data. Holding above the 123.00 level, the 1 hour chart for the EUR/JPY pair shows that the price is back below its 100 SMA, whilst the technical indicators head south below their mid-lines, all of which indicates that the risk remains towards the downside. In the 4 hours chart, the Momentum indicator has turned south within neutral territory, whilst the RSI also heads lower around 37, in line with the shorter term outlook. 

Support levels: 122.80 122.40 122.00 

Resistance levels: 123.60 124.10 124.45 

 

GBP/USD Current price: 1.4212

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The GBP/USD pair erased all of its Tuesday gains and fell down to 1.4191 on broad dollar's strength and the absence of macroeconomic data in the UK. Nevertheless, the Pound was among the best performers against the greenback, as the pair has roughly gave back some 60 pips on the day. The BOE will have its monthly economic policy meeting this Thursday, but it's hardly expected to change its ongoing policy. If something, focus will turn in comments about the possible risk of a Brexit. In the meantime the 1 hour chart for the pair shows that the price developed below a now bearish 20 SMA, whilst the technical indicators lack directional strength, but hold within bearish territory, suggesting the pair may slip further  during the upcoming sessions. In the 4 hours chart, the Momentum indicator has crossed below its 100 line with a strong bearish slope whilst the RSI indicator hovers in neutral territory and the price stands a few pips below a bullish 20 SMA, all of which increases chances of a downward continuation, particularly on a downward acceleration below the mentioned daily low.

Support levels: 1.4190 1.4150 1.4110

Resistance levels: 1.4240 1.4285 1.4330 

USD/JPY Current price: 109.33

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The Japanese yen fell for second day in-a-row against the greenback, as positive Chinese data and soaring worldwide stocks, forced investors to profit from the recent rally in the JPY. The USD/JPY pair rallied up to 109.39 daily basis, as disappointing US data played against the greenback. The pair has spent most of the American session consolidating between the mentioned high an 109.00, maintaining a short term positive tone, although with a decreasing upward momentum due to this latest ranging. The 1 hour chart shows that the price extended further after recovering above its 100 SMA late Tuesday, while the technical indicators hold well above their mid-lines, but with no directional bias. In the same time frame, the 200 SMA offers an immediate resistance around 109.50, and a break above it will imply a continued advance towards the 110.00 figure and beyond. In the 4 hours chart, the Momentum indicator turned south in overbought territory, but the RSI holds near 60, limiting the risk of a downward move for this Thursday. Nevertheless, the long term picture is still bearish, as it will take a recovery beyond 110.60 to support a steadier recovery in the pair.

Support levels: 108.90 108.40 107.95 

Resistance levels: 109.50 110.00 110.45

 

AUD/USD Current price: 0.7672

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The AUD/USD pair topped at 0.7715 during the past Asian session, when the release of the Australian Westpac Melbourne Institute Index of Consumer Sentiment took it down, after falling by 4.0% in April from 99.1 in March to 95.1. The downward correction in crude oil prices also weighed on the Aussie as it dragged down all of the commodity-related currencies. The pair fell down to 0.7633 during the American session, but managed to bounce some ahead of the close, indicating a limited downward potential in the short term. Technically, the 1 hour chart shows that the price remains below a bearish 20 SMA, whilst the technical indicators head nowhere within negative territory. In the 4 hours chart, however, the technical picture favors the upside, given that the price is holding above a bullish 20 SMA, currently around 0.7620, and the immediate support, while the RSI indicator resumed its advance around 56 and the Momentum indicator also heads north well above its mid-lines. At this point, the pair needs to break above 0.7720, this year high set last March, to actually recoup its bullish momentum and approach the 0.8000 region.

Support levels: 0.7620 0.7590 0.7560 

Resistance levels: 0.7680 0.7720 0.7760