EUR/USD: Bearish within range

EUR/USD Current price: 1.1131

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The EUR/USD pair edged marginally lower this Thursday, as the dollar benefited from an improvement in market sentiment during the Asian session, which made stocks rebound, further helped by BOE's decision to cut its rates to new record lows and extend its easing program. Down for a second day in a row, dollar's gains were limited against its European rival, as US weekly unemployment claims came in worse-than-expected for the week ending July 29th, at 269K, but still near its recent lows and pointing to a healthy labor market. Also, Factory Orders in the country for June resulted slightly better than expected, down by 1.5% against a previous -1.2%, down for a second month in-a-row.  There were no relevant data released in the EU.

The pair traded as low as 1.1113 before bouncing modestly, entering in wait and see mode after settling in the 1.1130 region, as investors are now in wait and see mode ahead of the US monthly employment report to be released this Friday. The US is expected to have added 180K new jobs in July, while the unemployment rate is expected to tick down to 4.8%. Wages are expected to remain unchanged. Overall, there´s little a good employment figure can do for the greenback, given that FED's decision to move rates will depend on inflation, as they have already recon that employment growth is strong.

As for the technical picture, the 4 hours chart present a bearish tone, with the price below a horizontal 20 SMA, currently around 1.1180, and indicators heading modestly lower below their mid-lines with limited downward strength. Adding to the bearish case, is the pair's failure to hold above the 1.1200 level earlier this week. Still a range bound scenario persist, with the pair not seen below the 1.1000 level in the nearest term.

Support levels: 1.1120 1.1085 1.1040

Resistance levels: 1.1160 1.1200 1.1235

EUR/JPY Current price: 112.58

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The EUR/JPY pair extended its decline down to 112.47, its lowest since July 11th, having broken below the 61.8% retracement of its latest bullish run between 109.36, the post-Brexit low, and 118.46, July's high  around 112.85, now the immediate resistance. The Japanese yen edged marginally higher against most of its major rivals, in spite of the positive tone among stocks, on dismal US data. Now holding a few pips above the mentioned low, the 1 hour chart presents a clear bearish tone, as the technical indicators resumed their declines after failing to overcome their mid-lines, whilst the 100 and 200 SMAs have accelerated their declines, with the shortest now offering a dynamic resistance around 113.60. In the 4 hours chart, the price is also well below its moving averages, while the technical indicators continue lacking directional strength, but within negative territory, also favoring a bearish extension on a break below 112.30, the immediate support.

Support levels: 112.30 111.90 111.50

Resistance levels: 112.85 113.25 113.60

GBP/USD Current price: 1.3110

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Bank of England´s Governor, Mark Carney, got ahead of the market this Thursday cutting UK's rates and reigniting its QE program. The BOE not only cut its main benchmark by 25bps to record lows of 0.25%, but also extended expanded its bond purchasing program, by £70 billion, £60 billion in government bonds and £10 billion in corporate bond purchases. The Central Bank also announced  a £100 billion loan program for banks, while slashing the UK's growth forecasts. To make it clear, Carney added  that the "BOE stands ready to take whatever action is needed," leaving doors open for more easing. The Pound plummeted afterwards, with the GBP/USD extending its decline towards the 1.3100 region, where it consolidate during the US afternoon. Technically, the  4 hours chart shows that the risk is towards the downside, as the price has extended well below its 20 SMA, while the RSI indicator is now near oversold levels, although losing downward strength, and the Momentum indicator hovers within bearish territory. The base of the latest range, has been set at the 1.3060 region, a level the pair can reach on a strong US employment report this Friday, with a break below it targeting the 1.3000 level, where some buying interest is expected to surge.

Support levels: 1.3100 1.3060 1.3025

Resistance levels: 1.3140 1.3190 1.3225

USD/JPY Current price: 101.17

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The USD/JPY pair has seen little action this Thursday hovering a few pips above the 101.00 level for most of the day, and pretty much ignoring what was going on in the rest of the financial world. The pair tends to enter wait-and-see mode ahead of the US Nonfarm Payroll report, and that's exactly what happened. The fact that stocks surged strongly in Asia and Europe, while the yen hold to its latest strength, clearly indicates that the risk for the yen remains towards the upside. From a technical point of view, the short term picture presents a modest bearish tone, given that in the 1 hour chart, the price remains well below a bearish 100 SMA, while the Momentum indicator has extended within bearish territory and the RSI indicator consolidates around 47. In the 4 hours chart however, the Momentum indicator diverges higher, crossing its 100 level towards the upside, whilst the RSI heads modestly lower around 36. Nevertheless, and as long as the price remains 101.60, a major static resistance, the risk is towards the downside, with scope to extend down to 100.00 on a poor US employment report.

 Support levels: 100.95 100.60 100.25

Resistance levels: 101.30 101.60 102.00

AUD/USD Current price: 0.7631

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The Australian dollar edged higher this Thursday, extending to a fresh weekly high of 0.7640 against its American rival, in spite of poor local data released during the past Asian session. According to official data, June retail sales rose 0.1% monthly basis, against the 0.3% consensus and  the 0.2% previous. In the second quarter, retail sales ex inflation surged by 0.4% quarterly basis, missing  estimates and the previous reading of 0.5%.  The Aussie found support in commodities and stocks, but mostly benefited from its rates, as despite the RBA cut its benchmark earlier this week, 1.5% is still far more attractive that record lows from other major economies. Technically, the pair maintains its bullish tone, both short and long term, with scope to retest the year high around 0.7830. Intraday, the 1 hour chart shows that the price is barely below the mentioned daily high and above a strongly bullish 20 SMA, while the technical indicators lack upward strength within positive territory, indicating there's room for further gains. In the 4 hours chart, the 20 SMA advanced, but stands well below the current level, while the technical indicators have lost their upward strength and turned south, still above their mid-lines.  Nevertheless, the downward potential seems limited, as long as the price holds above the 0.7600/10 region, a major static support.

Support levels: 0.7605 0.7550 0.7510

Resistance levels: 0.7675 0.7720 0.7760