EUR/USD: downward potential limited, despite Draghi

EUR/USD Current price: 1.1254

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The ECB unveiled its latest economic policy decision this Thursday, with actually no changes made to the monetary policy stance and some minor adjustments in its  growth´s forecast that were far from surprising the market. Draghi and Co. decided to leave rates unchanged at -0.4%, and announced that the ongoing bond-buy program will keep running until March 2017, or as long as required. The EUR/USD pair jumped to its highest in two weeks, printing 1.1326 as Draghi said that no additional stimulus was needed at this time, but later, during the press conference, he opened doors for more facilities in the future, while called for some help from European governments, hinting the need of some fiscal stimulus in the region.

The American dollar was broadly softer ahead of the announcement, but after the initial hesitation, ended up gaining ground across the board. Nevertheless the greenback remains vulnerable  on speculation the US Federal Reserve will remain on hold this month, and these intraday gains are not even close to revert the post-Payroll/ISM's losses. The EUR/USD pair 4 hours chart shows  that the price is finding some support around the 1.1240/50 region, the 50% retracement of its latest slide, while also holding above all of its moving average,  although technical indicators retreated from overbought readings, heading now lower within positive territory. The pair has an immediate intraday support in the 1.1210/20 region, as long as it holds above it, the downward risk will remain limited. Renewed buying interest above 1.1300, on the other hand, can see the pair retesting August high at 1.1366.

Support levels: 1.1215 1.1160 1.1120

Resistance levels: 1.1285 1.1330 1.1365

EUR/JPY Current price: 115.25

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The common currency gathered fresh momentum and extended its gains versus most of its majors rivals after the ECB decided to leave its economic policy unchanged, with the EUR/JPY pair advancing above the 115.00 level. Despite the common currency weakened after the initial reaction, a sharp slide in the Japanese yen kept the pair on demand, extending up to 115.33 in the American afternoon. Holding near the mentioned high, the short term picture is now bullish, as the price is standing above its 100 and 200 SMAs, both converging with a Fibonacci level around 115.00, providing an immediate intraday support, whilst technical indicators present bullish slopes within overbought territory. In the 4 hours chart, the price has recovered sharply above a modestly bullish 100 SMA, whilst the Momentum indicator heads sharply higher around its 100 level, and the RSI also advances, but already into positive territory, around 58.

Support levels: 115.05 114.60 114.20

Resistance levels: 115.45 115.90 116.40

GBP/USD Current price: 1.3305

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The GBP/USD pair extended its decline this Thursday, down to 1.3283 in the US afternoon, as investors bought back the greenback. There were no relevant macroeconomic releases in the UK, which will release its July trade balance figures for July during Friday's session, expected to show a smaller deficit than in the previous month. The pair holds around the 1.3300 figure at the end of the day, a few pips below the 1.3320 critical Fibonacci resistance, with an increasing bearish potential in the short term, as in the 1 hour chart, the price has also broken below a now bearish 20 SMA, while technical indicators have entered negative territory, now posting modest bounces from oversold readings. In the 4 hours chart, the price as accelerated its decline below a now horizontal 20 SMA, while indicators head modestly lower within negative territory, supporting some additional declines on another break below the 1.3285 support.

Support levels: 1.3285 1.3250 1.3210

Resistance levels: 1.3320 1.3360 1.3400  

USD/JPY Current price: 102.42

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The Japanese yen held to its gains during the first half of the day, helped by an upward surprise coming from Q2 GDP readings, up by 0.7% in the three months to June, against expectations of 0.0%. During the past Asian session, Bank of Japan’s Deputy Governor, Hiroshi Nakaso, signaled that rates could be cut deeper into negative territory, but failed to trigger a market's reaction. The USD/JPY pair remained mute, also after the ECB's announcement, but finally broke higher on dollar's demand, up to 102.54, where it stands by Wall Street's close. The  pair  trimmed part of its weekly gains, and the short term picture has turned partially bullish, as in the 1 hour chart, indicators have resumed their advances within overbought levels after a brief consolidative stage, although the price remains below a bearish 100 SMA, currently around 102.60, and the level to surpass to confirm further gains. In the 4 hours chart, the price is now above its 100 and 200 SMAs, while indicators have bounced sharply from their oversold levels, maintaining sharp bullish slopes, but within negative territory.

Support levels: 102.05 101.70 101.30 

Resistance levels: 102.60 102.95 103.25

AUD/USD Current price: 0.7642

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The Australian dollar advanced up to 0.7732 against the greenback, its highest in almost three weeks, underpinned by a sharp advance in natural gas prices which added roughly 4% after the large draw-down in stockpiles announced by the API report late Wednesday. Natural gas is Australia´s third largest export. Also, supporting the antipodean currency was an upward surprise from Chinese imports figures, as despite exports weakened in the country, imports rose by 1.5% in August after falling by 12.5% in July. The AUD/USD pair, however, eased after the ECB's disappointing decision, accelerating its decline in the US afternoon to close the day around 0.7640, not far from its daily low. Given that the price remains well above the 0.7600 level, the risk of a steeper decline seems limited, although in the short term, the risk has turned towards the downside, as the price has broken below its 20 SMA, whilst indicators have decelerated their declines but remain close to oversold readings. In the 4 hours chart,  indicators head lower almost vertically, crossing their mid-lines into negative territory,  and coming from overbought levels, whilst the price is currently breaking blow a still bullish 20 SMA, supporting a test of the mentioned 0.7600 figure.

Support levels:  0.7640 0.7600 0.7570

Resistance levels: 0.7690 0.7730 0.7770

WTI CRUDE  

Oil prices soared on the back of US stockpiles report, showing one of the largest draw-downs on record. West Texas Intermediate crude oil futures advanced up to $47.73 a barrel and held nearby by the end of the end, after the Energy Information Administration reported that commercial crude oil inventories fell by 14.5 million barrel. Gasoline stocks fell by 4.2 million barrels, against a 625K decline expected. Late Wednesday, the API report pre-announced this result by informing a 12.08M barrel slump. The news have taken out some of the pressure over an oversupply market, the main reason behind the intraday advance. From a technical point of view, the daily chart shows that  the price is back above its 20 and 100 SMAs, both still flat and converging around 47.20, while technical indicators have extended their upward slopes, and are currently entering bullish territory. In the 4 hours chart, the commodity stands above all of its moving averages while technical indicators are losing upward strength within overbought territory, but remain far from suggesting  the rally is exhausted.

Support levels: 47.20 46.60 45.90

Resistance levels: 47.70 48.45 49.20