EUR/USD: en route to 1.1280, then targeting critical 1.1460

EUR/USD Current price: 1.1196

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Dollar's sell-off extended this Tuesday, with the common currency jumping up to the 1.1230 region against its American rival, the highest since June 24th. There was no certain catalyst behind the decline, but market's negative sentiment towards the greenback, fueled by another round of soft US data. In the data front, industrial producer prices in the EU rose by 0.7% in June, beating expectations. Compared with June 2015, industrial producer prices decreased by 3.1% in the region, also better-than-expected.

In the US, Personal income increased $29.3 billion or 0.2%,  and personal consumption expenditures (PCE) increased 0.4%. The PCE price index increased 0.1%, while excluding food and energy, the PCE price index increased 0.1%. Overall, data matched previous month's readings, too weak, however, to support the USD.

The EUR/USD pair struggled with the 1.1200 region for most of the European morning, breaking above it  after Wall Street's plunged at the opening. The pair has reached its 100 DMA for the first time five in weeks, but technical indicators in the daily chart head strongly higher within positive territory, supporting an extension of the current rally up to 1.1280, where the price will meet a daily descendant trend line coming from 1.1615. In the shorter term, the 4 hours chart shows that the RSI indicator keeps heading north, despite being in extreme overbought territory, around 84, while the 20 SMA has accelerated it advance after crossing above the 100 and 200 SMAs, now around 1.1160. The momentum indicator, however, has been diverging lower form most of the day, implying a potential downward corrective move that can text the mentioned SMA.

Support levels: 1.1200 1.1160 1.1120

Resistance levels: 1.1200 1.1235 1.1280

EUR/JPY Current price: 113.16

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The EUR/JPY pair plummeted to a fresh 3-week low of 112.99, with the Japanese yen fueled by latest PM Shinzo Abe announcement. Abe confirmed a ¥28 trillion stimulus package seen less aggressive than initially estimated, as only one third of it will be applied to new spending. The pair bounced modestly from the mentioned low, holding a few pips above the 113.00 figure, and with the 1 hour chart showing that the price has accelerated far below its 100 and 200 SMAs, while the technical indicators have pared losses within oversold territory, but are far from suggesting an upward corrective movement. In the 4 hours chart, the Momentum indicator heads modestly lower below its 100 line, whilst the RSI indicator is now consolidating around 28, suggesting the pair may consolidate some before resuming its slide.

Support levels: 112.95 112.60 112.30

Resistance levels: 113.45 113.90 114.40

GBP/USD Current price: 1.3333

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The GBP/USD pair rose to its highest in three weeks, hitting 1.3365 mid American afternoon, supported by dollar's weakness and a sharp retracement in the EUR/GBP cross due to profit taking, after the cross reached the critical 0.8500 level. Also, supporting the Pound was a modestly positive UK Construction PMI. According to Markit, construction output fell by less-than-expected in July, down to 45.9 from June's 46.0, while new orders, fell at a slower pace than in the previous month, when they reach an over three-year low. Having retreated partially from the mentioned high, the GBP/USD pair maintains a positive tone in the short term, holding a few pips above 1.3320, the 23.6% retracement of its post-Brexit slump. Still, with the BOE's economic policy meeting around the corner, the pair will likely enter wait and see mode. In the  hours chart, the price has advanced above a modestly bullish 20 SMA, while the RSI indicator maintains its positive tone around 67, enough to keep the downside limited, despite the lack of upward momentum.

Support levels: 1.3320 1.3285 1.3250  

Resistance levels: 1.3365 1.3400 1.3440

USD/JPY Current price: 100.80

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The Japanese yen outperformed its major rivals, after Japan's government approved a ¥28 trillion stimulus package in another attempt to boost the economic growth and fight deflation. The package includes  ¥7.5 trillion in new spending, and will be applied over several years. The announcement, which was partially anticipated by markets, fell short of expectations, being far less aggressive than expected, resulting in the USD/JPY plummeting to 100.67, late US session.  With the pair having extended well below the 61.8% retracement of its latest rally, speculative interest is now targeting 99.98, July 8th low, although with a cautious stance, as nobody knows how the BOJ will react to the pair breaking through 100.00. In the short term, the downward pressure eased, as in the 1 hour chart, the technical indicators are turning modestly higher within oversold levels, but the risk remains towards the downside, as the price remains well below its moving averages, whilst the correction in technical indicators is not enough to confirm a bottom. In the 4 hours chart, the RSI heads lower around 22, while the Momentum indicator diverges modestly higher within negative territory, rather reflecting price's pause than suggesting an upward move.

Support levels: 100.60 100.25 100.00

Resistance levels: 101.10 101.50 102.00

AUD/USD Current price: 0.7601

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As expected, the Reserve Bank of Australia cut its cash rate by 25bps to a record low of 1.5% during the past Asian session, leading to a short-lived decline in the Aussie. The AUD/USD pair fell to 0.7485, but quickly recovered ground, rallying up to 0.7637 to end the day around 0.7600. Despite the cut, rates are among the highest among major economies, and in a world where central bankers are pushing rates into negative territory, the Aussie stands out as an attractive investment, due to rates' differentials. The pair settled right above the 23.6% retracement of this year's rally, and the short term picture supports an upside continuation, given that the technical indicators in the 1 hour chart recovered their bullish slopes after correcting overbought readings, whilst the 20 SMA heads sharply higher below the current level. In the 4 hours chart, the price bounced from its 200 EMA and stands now above an also bullish 20 SMA, although the technical indicators have lost upward strength and turned lower within positive territory. Still, a break through 0.7640, the immediate resistance, should lead to a continued advance up to 0.7834, this year high.

Support levels: 0.7590 0.7550 0.7510

Resistance levels: 0.7640 0.7675 0.7710