EUR/USD: Carney unleashes Brexit's demons

EUR/USD Current price: 1.1056

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After the market spent three days absorbing  the result of the UK referendum, BOE's Governor Mark Carney woke up Brexit's demons by stating that "monetary policy easing will likely be required over the summer." High yielders were generally firmer across the board, with the EUR/USD pair advancing up to 1.1154, and the GBP/USD pair flirting with 1.3500, but things turned to worse mid American afternoon, as following Carney's speech, news hit the wires reporting that the ECB is  “concerned about shrinking pool of eligible debt” and is looking at  looser QE rules as Brexit depletes asset rules. There was no official statement on the matter, but it was enough to  sent traders further into the greenback.

Data coming from Europe was mixed, with German Retail Sales up in real terms by 2.6% compared with the corresponding month of the previous year, below market's expectations, although monthly basis it came in up 0.9%. The unemployment rate in the country remained flat at 6.1% in June. In the EU, the Eurostat estimates inflation will be 0.1% in June, moving away from negative territory. In the US, weekly unemployment claims were modestly higher, up to 268K in the week ending June 24th, whilst the Chicago PMI printed 56.8, well above the 50.7 expected.

As for the EUR/USD pair  it fell down to 1.1023 to finally stabilize around 1.1050, pointing to resume its bearish trend, at least in the short term, as in the 1 hour chart, the price now moved below its 20 and 100 SMAs, whilst the technical indicators have accelerated their declines within negative territory. In the 4 hours chart, the price has broken below its 20 SMA, whilst the technical indicators head sharply lower, within negative territory, supporting a continued decline for this Friday, particularly on a break below 1.1020, the immediate support.

Support levels: 1.1020 1.0970 1.0925

Resistance levels: 1.1095 1.1130 1.1165

EUR/JPY Current price: 114.02

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The Japanese yen is weaker across the board, as BOE's announcement of upcoming easing this summer fueled stocks´ advances, weighing on the safe-haven currency. The EUR/USD pair retreated from its daily high of 114.79, but met some buying interest on a decline below the 114.00 figure, now holding a few pips above it. The short term picture remains neutral, as in the 1 hour chart, the price is holding above its 100 SMA, currently at 113.32, whilst the Momentum indicator is hovering around its mid-line, with no certain directional strength. The RSI indicator in the mentioned time frame, heads lower around 50, also lacking clear momentum, while in the 4 hours chart, the technical indicators have accelerated their declines and seem poised to break below their mid-lines, suggesting the pair may extend its decline on a break below the mentioned support.

Support levels: 113.65 113.30 112.75

Resistance levels: 114.60 114.95 115.45

GBP/USD Current price: 1.3244

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The British Pound received another harsh blow this Thursday, as BOE's Governor Mark Carney, gave  a speech titled "Uncertainty, the economy and policy,” in which he noted that  “the economic outlook has deteriorated" following the UK referendum's result, adding that some monetary easing will likely be required during the upcoming months. The BOE meets next July 14th, and the market has rushed to price in a rate cut, and probably an extension of the APP. The GBP/USD pair plummeted to 1.3213 after trading as high as 1.3496 during the European session, and remains near the low, with a strong bearish potential in the short and the long term. In the 1 hour chart, the price is currently below a sharply bearish 20 SMA, whilst the technical indicators have resumed their declines within negative territory. In the  4 hours chart, the technical bias is also bearish, as the price has accelerated below its 20 SMA, whilst the indicators have turned strongly lower, now heading south within negative territory.

Support levels: 1.3210 1.3160 1.3120

Resistance levels: 1.3275 1.3340 1.3390

USD/JPY Current price: 103.22

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The USD/JPY pair advanced to fresh weekly highs by the end of the US session, as worldwide stocks skyrocketed on news that the BOE is preparing to ease its economic policy further. Japan will release its Tokyo and Nation inflation figures during the upcoming Asian session, overall expected to remain subdued. A negative surprise in inflation will probably see the yen moving even lower, as it would increase chances of further BOJ's easing, underpinning the ongoing stocks' rally. The intraday technical picture is now bullish as in the 1 hour chart, the price has bounced from its  100 SMA, at 102.35, and is now approaching to the  200 SMA, the immediate resistance at 103.60. Technical indicators in the mentioned time frame, have turned north within positive territory, while in the 4 hours chart, indicators present a stronger upward tone, supporting a continued advance on a recovery above 103.50, the immediate resistance.

Support levels: 102.90 102.50 102.10

Resistance levels: 103.50 103.90 104.40

AUD/USD Current price: 0.7432

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The AUD/USD pair advanced up to 0.7472 early Thursday, but fell down to 0.7301 during the past Asian session, on talks the PBOC  will be allowing the Yuan to devalue further. Nevertheless, the pair recovered quickly from the level, a clear indication that buying interest is strong on dips. Technically however, the pair was unable to  settle above the 0.7450 level, the 38.2% retracement of this year's rally. The surprise announcement from BOE's Carney has produced little effects on the pair, as rising stocks neutralized dollar's strength against its antipodean rival. Technically, the 1 hour chart presents a neutral stance, with the price around a horizontal 20 SMA, and the Momentum indicator stuck around its 100 level, whilst the RSI indicator heads modestly lower around 52. In the 4 hours chart, the price remains well above its 20 SMA and 200 EMA, but the technical indicators head modestly lower within positive territory, limiting chances of a stronger rally at this point.

Support levels: 0.7400 0.7370 0.7330

Resistance levels: 0.7450 0.7500 0.7540