EUR/USD: waiting for Super Mario

EUR/USD Current price: 1.1234

Live Chart for the EUR/USD

The EUR/USD pair edged modestly lower this Wednesday, undermined by poor industrial output figures coming from Germany. The largest EU economy has been showing signs of economic weakness at the beginning of the third quarter, and this latest report confirms the slowdown in the industrial sector, as output during July fell by a seasonally adjusted 1.5% during July, when compared to the previous month. Majors, however, remain within their recent highs against the greenback, on diminishing hopes of  a US FED September rate hike.

Early Thursday the ECB is having an economic policy meeting, although the European Central Bank is expected to remain on hold. An increase in the amount of bond-buying seems unlikely, given that falling yields in the region are shrinking the range of eligible assets. The most the ECB can do is announce an extension of the QE program beyond the March 2017 current limit, but seems unlikely that could be enough to fuel local growth and inflation. Generally speaking, Draghi is expected to offer a dovish, cautious speech that may result in some temporal weakness of the common currency.

The pair retains a positive tone according to intraday readings, as in the 4 hours chart, the price is moving around a horizontal 100 SMA, but above a now bullish 20 SMA. In the same time frame, technical indicators have corrected overbought conditions, but settled well above their mid-lines, as investors entered wait-and-see mode. The same chart shows that the price extended up to 1.1271 during the past American session, retreating from the 61.8% retracement of its latest daily decline, and the level to surpass to see further gains this Thursday. Should the market prefer the greenback, the key support is now former intraday highs around 1.1210, as a move below it would result in a return to the 1.1160 region.

Support levels: 1.1210 1. 1.1160 1.1120

Resistance levels: 1.1275 1.1310 1.1365

EUR/JPY Current price: 114.35

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The Japanese yen was the best performer on the FX board this Wednesday, resuming its advance against all of its major rivals, as media reports suggest that local policymakers are split over what to do in this upcoming meeting,  with some supporting further rate cuts, but others wanting to remain on hold. The news added to broad dollar's weakness on poor macroeconomic data, resulting in the EUR/JPY pair sinking to 113.80, the lowest since August 26th. The pair pare losses at a major Fibonacci support, the 50% retracement of the June low/July high rally, but the risk remains towards the downside in the short term, as in the 1 hour chart, the price is developing below its moving averages, with the 100 SMA accelerating its decline above the current level, and indicators turning lower within neutral territory, after recovering from extreme oversold territory. In the 4 hours chart, the price is a handful of pips above the 100 and 200 SMAs, both within a tight 20 pips range, while indicators are recovering ground from oversold levels, but still within negative territory, limiting the downward potential, but far from suggesting a steeper recovery ahead.

Support levels: 113.90 113.45 113.05

Resistance levels: 114.60 115.05 115.60

GBP/USD Current price: 1.3328

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The British Pound erased most of its weekly gains against the greenback, weighed by dismal UK data and comments from BOE's Governor Carney, at a parliamentary hearing. Industrial Production in the kingdom advanced by 0.1% during July, while Manufacturing Production fell by 0.9% in the same month. As for Governor Carney, he was questioned by lawmakers about making  the decision to provide more stimulus right after the Brexit referendum, given that  the economy has been quite resilient to the news, but he said he is quite comfortable with such decision, and that it was that decision which avoided a deeper economic chaos. The GBP/USD pair fell down to 1.3318 during the American session, meeting some short term buying interest around the key Fibonacci support, but looking increasingly bearish in the 4 hours chart, as the bounce has been shallow, while the price remains below its 20 SMA. In the same chart, technical indicators present sharp bearish slopes and are about to cross their mid-lines towards the downside. A downward extension beyond 1.3320, should favor further slides for this Thursday, with scope to return to the 1.3250 region, where the next batch of buying is waiting.

Support levels: 1.3320 1.3285 1.3250  

Resistance levels: 1.3275 1.3310 1.3360

USD/JPY Current price: 101.75

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The USD/JPY pair fell down to 101.20, on the back of fading expectations of a rate hike in the US after the release of the ISM non-manufacturing index last Tuesday, which added up to the dismal Nonfarm Payroll report released last Friday. The yen was further supported by speculation that the BOJ will remain on-hold this month, in the wake of the split stance of Japanese policy makers. The USD/JPY pair, however, recovered partially from the mentioned low, but the upward potential remains limited in the short term, as in the 1 hour chart, technical indicators have lost their upward strength after entering in positive territory, while the price is far below its moving averages, with the 100 SMA accelerating above the 200 SMA, both in the 102.70/90 region. In the 4 hours chart, the price is a few pips above a bullish 100 SMA, while indicators recovered from oversold territory, but remain well below their mid-lines.

Support levels: 101.20 100.65 100.20  

Resistance levels: 102.05 102.50 102.90

AUD/USD Current price: 0.7671

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The AUD/USD pair rallied up to 0.7697, its  highest since mid-August, but closed the day a handful of pips below its opening, down after a five-day winning streak. Australia released its Q2 GDP figures during the past Asian session, showing that the local economy grew by 0.5% in the three months to June, slightly below market's forecast for a 0.6% gain. Year-on-year  GDP came in at 3.3%, beating expectations of a 3.2% advance. The 1 hour chart for the pair presents now a neutral stance, with the price holding a few pips below a horizontal 20 SMA, and technical indicators heading nowhere around their mid-lines. In the 4 hours chart, however, the risk remains towards the upside, as the 20 SMA continued heading sharply higher below the current level, whilst technical indicators have recovered modestly within overbought territory, following a modest downward correction. At this point, the pair needs to settle above the 0.7700 figure to be able to extend its gains, with scope then to retest the year high around 0.7830.

Support levels: 0.0.7645 0.7600 0.7570

Resistance levels: 0.7695 0.7730 0.7770