EUR/USD: dollar favored in the longer run

EUR/USD Current Price: 1.1184

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The American dollar´s upward momentum continued easing on Thursday, despite US data beat expectations, as commodities  prices rose. The EUR/USD pair surged up to 1.1216, but failed to sustain gains above the 1.1200 mark, as in the longer run, the market is still focused on the upcoming US rate hike. Data coming from the US was generally positive, although not enough to convince the FED, as behind the headlines, there were some weak soft sub-components.   

The macroeconomic calendar was pretty busy in the US, with the April´s Durable goods orders jumping to 3.4% from an upwardly revised 1.9% increase in March. Non-defense capital goods orders excluding aircraft, however, fell 0.8%  after an upwardly revised 0.1% drop the prior month. Weekly unemployment claims for the week ending May 21 came in at 268K, a decrease of 10K from previous week's 278K, yet the 4-week moving average surged to 278.5K from previous 275.5K. Finally, Pending Home sales for March surged for a second consecutive month, up by 1.4%. 

Now trading around 1.1180, the EUR/USD pair 4 hours chart shows that the price is barely above a still bearish 20 SMA, whilst the 100 SMA has crossed below the 200 SMA far above the current level. In the same chart, the RSI indicator is retreating from its 50 level after failing to advance beyond it, while the RSI heads north, but below the 100 line, all of which suggests that the upside is still limited. Renewed selling pressure below the 1.1160 should see the pair resuming its decline this Friday, with scope to extend its decline down to 1.1080.

Support levels: 1.1160 1.1120 1.1080 

Resistance levels: 1.1200 1.1245 1.1280

EUR/JPY Current price: 122.70

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The EUR/JPY pair fell down to a fresh weekly low of 122.25, as the Japanese yen strengthened on the back of some comments coming from  Masatsugu Asakawa, the vice-minister of finance for international affairs, who said that intervention might be used only to slowdown a sharp appreciation of the yen rather than to defend a particular level. Investors understood the comment as no intervention at sight, pushing the yen up against all of its major rivals. Despite having trimmed half of its daily losses, the short term picture still favors the downside ahead of Friday's opening, as in the 1 hour chart, the price is now below a bearish 100 SMA, whilst the technical indicators are hovering around their mid-lines, with no clear directional strength. In the 4 hours chart, the price remained capped by a horizontal 20 SMA in the 123.20 region, whilst the technical indicators also lack directional strength around their mid-lines. 

Support levels: 122.50 122.00 121.60

Resistance levels: 123.20 123.60 124.00

GBP/USD Current price: 1.4648

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The GBP/USD pair extended its weekly rally up to 1.4739, but turned lower after the release of some soft UK data. The second estimate of the Q1  GDP came in at 0.4%, as previously estimated, although the year-on-year comparison fell to 2.0% from 2.1%. BBA mortgage approvals fell to 40.1K in April, down from 45.1K in March  and below the median forecast for a more modest decline to 44.7k, the lowest reading since March 2015. The Pound eased further in the US afternoon, and trades near its daily low set at 1.4639, with the intraday technical picture suggesting that the downward corrective move can continue, as in the 4 hours chart, the technical indicators have retreated sharply from over near overbought levels and maintain their bearish slopes as they approach to their mid-lines. In the same chart, the 20 SMA heads sharply higher, now around 1.4610, while the 61.8% retracement of the latest bearish run stands around 1.4600, making of the region a strong support in the case of further declines.  

Support levels: 1.4615 1.4570 1.4525

Resistance levels: 1.4690 1.4730 1.4770 

USD/JPY Current price: 109.92

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The yen strengthened during the past Asian session, with the USD/JPY pair falling down to 109.41 before paring losses. The pair was affected by speculation the BOJ won't be intervening any time soon, and will only use such tool in the case of an extreme and sudden appreciation of the Yen. An intraday rally was reversed on a spike above the 110.00 figure, and the pair is now holding near its low, ahead of the release of Japanese National and Tokyo inflation figures for April and May respectively, and are generally expected to be softer than previous ones, which means the market may sell back the Japanese currency on speculation of some easing extension coming from the BOJ.  The technical structure remains neutral, with the pair meeting some short term buying interest around 109.50,a major Fibonacci support, but the downward pressure increases, as the technical indicators look softer and point to break below their mid-lines in intraday charts. The key support for this Friday is the next Fibonacci level around 108.70, as it will take a break below this last to confirm additional bearish strength.

Support levels: 109.50 109.20 108.70

Resistance levels: 109.90 110.25 110.60 

AUD/USD Current price: 0.7216

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The AUD/USD pair keeps consolidating around the 61.8% retracement of this year's bullish run, having however, closed the day in the green. In Australia, private capital expenditure contracted by 5.2% in the first quarter of 2016, below the consensus of -3.5% and also below the upwardly revised figure of +1.8% in the last quarter of 2015, which sent the pair down to 0.7161, although it later bounce on the back of rising oil prices. The consolidative phase is by no means a sign of downward exhaustion, but is clearly reflecting that further easing in Australia is now fully priced in. From a technical point of view, the 4 hours chart shows that the pair maintains a neutral stance, hovering a few pips above a flat 20 SMA, whilst the technical indicators lack directional strength, but hold within positive territory. Further gains seem unlikely, yet if somehow the Aussie gains, selling interest will probably surge on advances up to the 0.7330 region.

Support levels: 0.7180 0.7145 0.7100 

Resistance levels: 0.7250 0.7290 0.7330