EUR/USD: risk of a bearish extension below 1.1050

EUR/USD Current price: 1.1083

View Live Chart for the EUR/USD

There was little action across the forex board this Monday, particularly when it comes to European currencies. The EUR/USD pair traded around Friday's close, having been unable to regain the 1.1100 level, as a spike up to 1.1104 was quickly reversed. Macroeconomic news in the EU were scarce, with only Germany releasing its Industrial Production data for June, slightly better than expected, up by 0.8% monthly basis, and reversing May's decline of 0.9%, hardly enough to support EUR's buying. In the US, the Federal Reserve’s Labor Market Conditions Index rose 1 point in July, the first increase this year, reaffirming the strength of the local labour market.

From a technical perspective, the pair presents a neutral-to-bearish stance in the short term, as it held below 1.1095, the 50% retracement of these past two weeks' rally, for most of the day, after briefly falling below  the 61.8% retracement of the same rally last Friday. In the 1 hour chart, the price is developing below its moving averages, with the 20 SMA near the mentioned Fibonacci resistance and the 100 SMA extending its decline in the 1.1140 region. Technical indicators in the mentioned time hold below their mid-lines, but with limited directional strength. In the 4 hours chart, the price is pivoting between the 100 and 200 SMAs, whilst the 20 SMA heads sharply lower far above the current level, and indicators are also lacking momentum, but within negative territory.

Support levels: 1.1045  1.1010 1.0970

Resistance levels: 1.1095 1.1130 1.1160

EUR/JPY Current price: 113.58

View Live Chart for the EUR/JPY

The EUR/JPY pair surged up to 113.75, trading nearby at the end of the day, recovering from the 3-week low set at 112.30 last Friday, after a stronger-than-expected US employment report. Data coming from Japan was weaker-than-expected, as the trade surplus was half market's expectations, weighing on the currency. Technically, the intraday recovery stalled below the 113.90 region, the 50% retracement of the latest bullish run at 113.95, the level to surpass to see the current rally extending. Short term, the 1 hour chart shows that price is between its 100 and 200 SMAs, with the shortest around 113.00 and the largest at 114.10, both maintaining bearish slopes. Technical indicators in the mentioned time frame retreat from near overbought levels within positive territory, diverging from price action but not yet signaling a bearish continuation. In the 4 hours chart, technical indicators present a modest positive tone, heading higher above their mid-lines, yet the price remains well below its moving averages, suggesting any upcoming recovery will likely be short lived.

Support levels: 113.20 112.85 112.40

Resistance levels: 113.95 104.40 104.85

GBP/USD Current price: 1.3034

View Live Chart for the GBP/USD

The GBP/USD pair trades near the 3-week low posted last Friday at 1.3020 by the end of the day, still suffering the effects of the Bank of England's decision to extend its monetary easing program. The pair advanced intraday up to 1.3077, from where it slowly grinded lower all through the rest of the day, as the lack of news coming from the UK left traders focused in the BOE. This Tuesday, the United Kingdom will release June's manufacturing and industrial production figures, alongside with the trade balance for the same month, the firsts expected to have improved modestly compared to the previous month. Nevertheless, and given the outcome of June and July data seen lately, there's a good chance that the numbers will be disappointing, pressuring the Pound further. From a technical point of view, the short term picture favors a new leg lower, as in the 1 hour chart, the price is below a bearish 20 SMA, whilst the technical indicators remain flat within negative territory, with the RSI indicator near 37 and with no aims of turning higher. In the 4 hours chart, the 20 SMA presents a strong bearish slope, currently around 1.3143, while the Momentum indicator heads modestly higher within negative territory and the RSI indicator consolidates around 34. Friday's low of 1.3020 is the immediate support, with a break below  it exposing the pair to an extension below the 1.3000 figure.

Support levels: 1.3020 1.2975 1.2940

Resistance levels: 1.3060 1.3085 1.3120

USD/JPY Current price: 102.48

View Live Chart for the USD/JPY

The Japanese yen weakened on this first day of the week, with the USD/JPY pair rising up to 102.65 during the American afternoon, its highest since August 2nd. Data coming from Japan showed that the adjusted current account came in at ¥1.65 trillion, well below the surplus of ¥3.20 trillion for July expected, but above the previous ¥1.41 trillion. Undermining yen's demand were stronger oil prices, and a steady advance in Asian and European  stocks. Despite the short term positive tone, the Japanese yen maintains its long term bullish trend, and a test of the 100.00 level in the pair can't be disregarded. In the meantime, the 1 hour chart shows that the price reached its 200 SMA, unable to extend beyond the indicator, but hovering around it, whilst indicators have partially corrected lower, but turned flat within positive territory, giving the firsts signs of upward exhaustion. In the 4 hours chart, the Momentum indicator heads higher above its 100 level, but the price is well below its moving averages whilst the RSI indicator is turning lower from near overbought levels, limiting chances of a steeper advance. Still, the pair needs to break below the 101.8 region to resume its bearish decline, whilst an extension above 102.60 could see the pair advancing up to 103.50.

Support levels: 102.10 101.80 101.50

Resistance levels: 102.60 103.10 103.50

AUD/USD Current price: 0.7659

View Live Chart for the AUD/USD

The AUD/USD pair rallied up to 0.7572, just a pair fell down to 0.7596 at the beginning of the day, after the release of disappointing Chinese data, as despite the trade surplus widened in dollar terms to $52.3 billion, exports fell by 4.4% whilst imports edged 12.5% lower during July. Nevertheless, the pair quickly shrugged of the bad news, underpinned by  a continued recovery in oil prices. China will release its July inflation data during the upcoming Asian session, with a negative result probably affecting the pair in the short term, although slides will likely be seen again as buying opportunities. Technically, the 1 hour chart shows that technical indicators have turned modestly lower from within overbought territory, but given that the price is near its recent highs and that the 20 SMA heads higher far below the current level, the downward potential seems limited. In the 4 hours chart, the price is above a strongly bullish 20 SMA, while the technical indicators also turned lower above their mid-lines, suggesting the pair may correct lower before trying to achieve new highs.

Support levels: 0.7640 0.7600 0.7570

Resistance levels: 0.7675 0.7720 0.7760