EUR/USD: dollar advances, but caution prevails

EUR/USD Current price: 1.0988

The EUR/USD pair started the day with a strong footing, rallying up to 1.1059 ahead of the European opening. Yet the rally lost steam after London's opening bell, and the pair slowly eased, falling below the 1.1000 level before the release of the US inflation data, which resulted better-than-expected in November and compared to a year before, as it rose by 0.5% compared to previous 0.2%. Monthly basis however, inflation remained unchanged. The net readings, ex food and energy matched markets' expectations, overall positive and dollar supportive. The EUR/USD pair remains below the 1.1000 level ahead of the US opening, and the 1 hour chart shows that the price is currently below a mild bearish 20 SMA, while the Momentum indicator lacks directional strength around the 100 level, and the RSI anticipates some further declines, heading lower around 46. In the 4 hours chart, the price is finding some short term support around a horizontal 20 SMA at 1.0980, while the technical indicators head lower, but still above their mid-lines, increasing the risk of a downward move towards the 1.0945 region.

Support levels: 1.0980 1.0945 1.0910

Resistance levels: 1.1000 1.1045 1.1080

GBP/USD Current price: 1.5152

View Live Chart for the GPB/USD

The GBP/USD pair is stuck around the 1.5150 level, having been unable to attract investors this Tuesday, despite the release of the UK inflation data. Earlier today, the kingdom published its November data slightly better-than-expected, but far from resulting encouraging, as the CPI rose by 0.1% compared to a year before, but remained unchanged monthly basis. The producer price index fell further into the red in the same month, but the Pound held steady. Technically speaking, the short term picture is neutral, as in the 1 hour chart, the price is hovering around its 20 SMA, whilst the technical indicators head nowhere around their mid-lines. In the 4 hours chart, the bias is neutral-to-bearish, given that the price is being capped by its 20 SMA, flat around 1.5165, while the technical indicators stand horizontal around their mid-lines.

Support levels: 1.5120 1.5090 1.5050

Resistance levels: 1.5165 1.5200 1.5240

USD/JPY Current price: 121.15

View Live Chart for the USD/JPY

The USD/JPY pair trades near its daily high of 121.21, having erased all of its intraday losses ahead of the US opening. The pair has been capped by a slightly bearish 100 DMA ever since the week started, and retains an overall bearish tone in the longer term, albeit with the FED's outcome to be release in a bit more than 24 hours, is quite unlikely that technical readings will determinate the future of the pair in term. Shorter term, the 1 hour chart shows that the price remains below a bearish 100 SMA while the technical indicators are moving back and forth around their mid-lines, lacking clear directional strength. In the 4 hours chart, the technical indicators have corrected higher, but hold well below their mid-lines, whilst the 100 and 200 DMAs converge around 122.40. Overall, the upside is expected to remain limited, with selling interest now probably waiting around 121.35.

Support levels: 121.00 120.60 120.30

Resistance levels: 121.35 121.70 122.20

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