EUR/USD: still waiting for directional clues

EUR/USD Current price: 1.1255

Live Chart for the EUR/USD

The American dollar edged marginally lower in the US afternoon, as local share markets traded in a moderated fashion, with Wall Street hovering around its daily opening for most of the day. The market remains in wait-and-see mode ahead of the upcoming economic policy decisions from some major Central Banks, starting this Thursday with the BOE, and ending next week with the FED and the BOJ. There were some minor releases in Europe, including August CPI for Italy and French, which remained steady at low levels, in line with the deflationary levels seen in the region. The EU as a whole, also released its Industrial Production data for July, which fell by 1.1%, missing expectations of a 0.9% decline, and leaving the year-on-year reading at -0.5%. In the US, with the MBA mortgage approvals were up to 4.2% from previous 0.9%,  whilst the August export price index came in at -2.4%, in line with expectations, but the import price index fell by 0.02%.

 The EUR/USD pair picked up momentum and climbed to 1.1273, surpassing its previous weekly high by a couple of pips before retreating to the current 1.1250 region.  There has been no major progress from a technical point of view, given that the price remains stuck within Friday's range, and in the 4 hours chart, the price is now above its moving averages that anyway remain all together in a tight 20 pips range, a clear indication of the absence of directional strength. In the same chart, technical indicators head higher above their mid-lines, but the movement has been too shallow to be enough to confirm the rally will extend during the upcoming hours. A daily descendant trend line coming from this year high at 1.1615, stands this Thursday around 1.1300, the level to break to see the pair gaining some additional ground towards 1.1366, August monthly high. 

Support levels: 1.1200 1.1160 1.1120

Resistance levels: 1.1300 1.1335 1.1370

EUR/JPY Current price: 115.28

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The EUR/JPY pair advanced intraday up to 116.08, but quickly erased most of its intraday gains, as while the common currency holds ground against its American rival, the Japanese yen strengthened against the greenback.  Now trading around 115.28, the EUR/JPY pair held daily basis above the 115.00 level, but the short term risk is now towards the downside, given that in the 1 hour chart, the technical indicators have entered negative territory, presenting modest bearish slopes. In the same chart, the 100 and 200 SMAs converge around 115.05, a few pips above a Fibonacci support, and a break below this region will likely fuel the decline during the upcoming sessions. In the 4 hours chart, the Momentum indicator keeps heading higher within positive territory whilst the price remains well above a bullish 100 SMA, currently around 114.65, although the RSI indicator has turned lower, now around 52, all of which suggest that the downside risk is for now limited.

Support levels: 115.05 114.65 114.20

Resistance levels: 115.45 115.90 116.30

GBP/USD Current price: 1.3224

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The GBP/USD pair extended its decline down to 1.3138, a fresh 2-week low, as mixed employment data, prompted further profit taking ahead of the BOE's economic policy meeting this Thursday. The unemployment rate remained steady at 4.9 in the three months to July,  while in the same period, the number of people at work increased by 174K, up to 31.77 million. Part-time employment rose by 126K, while wages ticked modestly lower, as total income resulted at 2.3%YoY against previous 2.5%, whist the average earnings excluding bonus resulted at 2.1% against previous 2.3%. The pair, however, bounced sharply in the US afternoon, amid broad dollar's weakness, presenting now a bullish stance for the short term. In the 1 hour chart, the price has accelerated above its 20 SMA that anyway remains flat around 1.3190, while technical indicators entered positive territory, maintaining their bullish slopes. In the 4 hours chart, the recovery stalled around the 200 EMA at 1.3235, while the 20 SMA maintains its bearish slope above this last, suggesting that further gains are not yet confirmed. In the same chart, technical indicators have recovered within negative territory, but remain below their mid-lines, also indicating that the upward potential remains limited.

Support levels: 1.3190 1.3150 1.3110

Resistance levels: 1.3235 1.3280 1.3320

USD/JPY Current price: 102.38

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Having traded as high as 103.35, the USD/JPY pair closed the day modestly lower in the 102.30 region, undermined by dollar's weakness. The pair started the day advancing, on continued rumors coming from Japan over the possible measures to be adopted by the BOJ next week, including cutting rates further into negative territory and accelerating the pace of JGB purchases. The  pair is now flat weekly basis, not actually a surprise considering that both Central Banks are expected to make some interesting announcements next week. In the meantime, the short term picture for the pair is bearish, as in the 1 hour chart, the price is pressuring a modestly bullish 100 SMA, while technical indicators have resumed their declines within bearish territory after a brief period of consolidation. In the 4 hours chart, the price is a handful of pips above a still bullish 100 SMA, around 102.10, the Momentum indicator presents a modest bullish slope above its 100 line, while the RSI indicator heads south around 48, suggesting that a break below the mentioned level should result in a stepper decline this Thursday.

Support levels: 102.10 101.65 101.20

Resistance levels: 102.50 102.90 103.35

AUD/USD Current price: 0.7475

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The AUD/USD pair staged a minor recovery this Wednesday after falling down to 0.7441 late Wednesday, but pared gains below the 0.7500 level, maintaining a negative bias ahead of a new day opening. The Aussie has turned increasingly bearish ever since failing to regain its upward trend earlier this month, when it briefly advanced beyond the 0.7700 level. Australia will release August employment data during the upcoming Asian session, with employment expected to have added 15.0K new jobs in the month, and the unemployment rate foresee at 5.7%, unchanged from July. Worse-than-expected numbers should fuel the decline of the antipodean currency, putting price one step closer to the critical 0.7250 long term support. Shorter term, the 1 hour chart shows that the technical outlook turned neutral, as the price is hovering around a horizontal 20 SMA, whilst indicators head nowhere around their mid-lines. In the 4 hours chart, the Momentum indicator recovered ground within bearish territory, but the price remains well below a strongly bearish 20 SMA whilst the RSI indicator consolidates near oversold territory, maintaining the risk towards the downside.

Support levels: 0.7450 0.7420 0.7380

Resistance levels: 0.7490 0.7530 0.7565