EUR/USD: grinding higher, but still below critical 1.1189

EUR/USD Current price: 1.1108

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Save havens dollar and yen took a breath during the first half of the day, recovering modestly across the board as, despite equities in  Asia and Europe continue to move higher, the momentum decelerated. The EUR/USD pair managed to rally up to 1.1119 after Wall Street's opening,  but failed to extend its gains, hovering around the 1.1100 figure by the end of the day.

There were little relevant macroeconomic data both shores of the Atlantic, although EU industrial production declined by -1.2% MoM in May, whist April reading was upwardly revised to 1.4%. In May, and compared to a year before, production rose by 0.5%, below market's expectations. Considering latest German data, also disappointing in the industrial and manufacturing sector, the readings are a clear indication that the region is struggling with economic growth. In the US, import prices rose 0.2% in June, after rising 1.4% in May, while export prices surged by 0.8% following a 1.2% advance in May.

From a technical point of view, the EUR/USD pair continues to show little progress, trapped within a clear range between 1.1000 and 1.1180 for a third consecutive week. Investors have turned extremely cautious after the latest political developments in the region, and it may take an ECB economic policy meeting to actually bring it back to life. Technically, the 4 hours chart shows that a bearish 100 SMA keeps capping the upside, but that buying interest surges around the 20 SMA. Technical indicators in the mentioned time frame stand within positive territory, but lacking clear directional strength. At this point, the pair needs to advance above 1.1189, the post-Brexit high to present a more positive outlook, whilst beyond 1.1000, the risk turns towards the downside, with scope then to test 1.0910.

Support levels:  11040 1.1000 1.0960

Resistance levels: 1.1110  1.1155 1.1190

EUR/JPY Current price: 115.85

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The EUR/JPY pair edged modestly lower this Wednesday, mostly consolidating its latest advance around the 50% retracement of its latest daily slump, as both currencies gained some ground against their American rival. Japan’s economy minister Ishihara said that so far, printing money has not been discussed between Abe and Bernanke in their latest meeting, bringing some relief to the Japanese currency. Intraday, indicators have corrected the extreme overbought conditions reached earlier this week, whilst the 100 SMA has crossed above the 200 SMA, all of this in the hourly chart, maintaining the risk towards the upside. In the 4 hours chart, technical indicators have also retreated from overbought territory, with the Momentum indicator heading lower within positive territory and the RSI indicator consolidating around 68, limiting chances of a downward move.

Support levels: 115.70 115.25 114.80

Resistance levels: 116.40 116.85 117.30

GBP/USD Current price: 1.3161

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GBP/USD snapped a 4-day winning streak, extending its rally at the beginning of the day up to 1.3338, the highest in over a week, from where it retreated to end the day at current 1.3150 region. Theresa May has been officially named as the UK Prime Minister this Wednesday, after Cameron finally resigned. May is no rush to trigger the article 50, but she said that she will honor the referendum's result. Attention now shifts to the upcoming BOE's meeting this Thursday, as the Central Bank is expected to cut its benchmark interest rate to a new record low of 0.25%, after maintaining them at 0.5% since March 2009. Also, Governor Carney is expected to anticipate further easing for the August meeting, after reviewing growth and inflation forecasts. The pair trades a few pips above its daily low, with a strong bearish tone in the short term, as in the 1 hour chart, the price is now well below a bearish 20 SMA, whilst the technical indicators maintain their bearish slopes near oversold readings. In the 4 hours chart, indicators retreated from overbought levels, but remain within positive territory, whilst the 20 SMA has lost upward potential, but remains below the current level, now at 1.3100.

Support levels: 1.3145 1.3100 1.3060

Resistance levels: 1.3220 1.3265 1.3310

USD/JPY Current price: 104.32

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After flirting with the 105.00 region on Tuesday, the USD/JPY pair retreated down to 103.90 during the last American session, although it quickly regained the 104.00 level. Market entered in wait-and-see mode after the pair added roughly 4% ever since the week started, and is now waiting for BOJ's action to decide whether to keep selling the JPY or not.  Japan PM Abe’s adviser Honda was on the wires at the beginning of the day, saying that BOJ should expand monetary stimulus as soon as this month, but investors will now need to see some action before pushing the pair higher. Technically, and according to the 1 hour chart, the pair seems poised to continue consolidating, as indicators head modestly higher within neutral territory, whilst the 100 SMA has now advanced modestly above the 200 SMA. In the 4 hours chart, the rally stalled around  a bearish 200 SMA, currently at 104.75, whilst the technical indicators have corrected extreme overbought readings, but lost downward strength well above their mid-lines, indicating a limited downward potential at this point.

Support levels: 103.90 103.50 103.10

Resistance levels: 104.75 105.20 105.60

AUD/USD Current price: 0.7613

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The Aussie retreated from a fresh 3-week high of 0.7657 against the greenback, ending the day however above the 0.7600 figure. Data coming from Australia earlier in the day showed that consumer confidence in July dropped to 99.1 from previous 102.2, probably due to the political uncertainty that surged after the latest elections. Attention will focus now in Australian June employment data, expected generally softer than the previous monthly reading, as the unemployment rate is expected to tick higher to 5.8%, whilst the employment change is expected at 10.1K. If the readings are even worse-than-expected, the AUD/USD pair may extend its decline, furthermore on an acceleration. below 0.7600, the 23.6% retracement of this year rally and the immediate support. The price has reentered the daily ascendant trend line briefly surpassed on Tuesday, and the 1 hour chart presents a moderate downward potential, as the price is pressuring a bearish 20 SMA, while the technical indicators head south around their mid-lines. In the 4 hours chart, the price is holding above a bullish 20 SMA, but the technical indicators have turned south within positive territory after posting lower highs, increasing the risk of a bearish extension for this Thursday.  

Support levels: 0.7600 0.7555 0.7510

Resistance levels: 0.7660 0.7710 0.7770