EUR/USD Current price: 1.0899
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The EUR/USD pair closed with gains, and near its daily high set above the 1.0900 figure, helped by a run towards safety triggered by China. Chinese stocks led the way, as the Shanghai Composite plummeted over 7% during the first hour of trading, leading to a second early close in the week. The decline dragged worldwide stocks lower, although they recover some ground by the end of London's session after Beijing announced it will suspend the rule that pauses trading after a 5% decline and suspends it after a 7% decline, as its seems it's only good to fuel the sell-off in equities these days. European data was mixed, as the EU´s economic sentiment indicator unexpectedly rose to 106.8 in December from 106.1 in November, significantly better than consensus, but Retail Sales for the same month disappointed, falling for a second month in-a-row. In the US, initial jobless claims dropped to 277K, better than previous, in line with the rising trend born early December, slightly disappointing reading ahead of the US Nonfarm Payroll report to be release early Friday.
The technical picture has turned bullish short term, as in the 1 hour chart, the intraday declines had found buyers around a bullish 20 SMA, while the technical indicators are turning back higher after correcting overbought readings reached earlier in the day. Nevertheless, the pair is still unable to advance beyond the 200 SMA, the immediate resistance around 1.0880. In the 4 hours chart, the technical indicators present a clear upward momentum within positive territory, whilst the price has extended above a bearish 20 SMA. Also, the price is above the 38.2% retracement of the December advance at 1.0845, the level to break to reverse the ongoing upward tone.
Support levels: 1.0845 1.0800 1.0750
Resistance levels: 1.0925 1.0960 1.1000
EUR/JPY Current price: 128.04
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The EUR/JPY pair reversed its early slide and closed in the green above the 128.00 level, after reaching a lower low for the week at 126.77, as the Japanese yen appreciated during the first half of the day, but the EUR stood victorious during the second half of the journey. The pair presents extreme oversold conditions in the daily chart, where the technical indicators seem to be ready to turn higher, supporting at least an upward corrective movement for this Friday. Shorter term, the 1 hour chart shows that the 100 SMA has extended its decline further above the current level, now providing an immediate resistance around 128.65. In the same chart, the Momentum indicator heads higher above the 100 level, while the RSI indicator is now flat around 59, in line with further advances. In the 4 hours chart, the RSI indicator has begun correcting its extreme oversold readings and heads higher around 42 while the Momentum indicator is crossing its mid-line towards the upside, supporting the shorter term perspective.
Support levels: 127.50 127.15 126.60
Resistance levels: 128.20 128.65 129.10
GBP/USD Current price: 1.4606
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The British Pound fell to 1.4532, its lowest since June 2010 against the greenback, before finally bouncing some to close the day around the 1.4600 level, erasing most of its intraday gains. Down for a seventh day in a row, data coming from the UK showed that house prices in the three months to December were 1.6% higher than in the previous three months, according to Halifax, well above the 0.3% increase expected. Positive at a first glance, the undertone of the news is negative, as its implies fewer chances of a rate hike over time, as it signals a possible housing bubble. Anyway, in not about housing data, but the Brexit referendum looming the main reason beyond the latest Pound decline. The pair may now advance further on correction, although is not yet confirmed short term, as in the 1 hour chart, the price is struggling around a bearish 20 SMA, while the technical indicators head higher, but are still below their mid-lines. In the 4 hours chart, the technical indicators are heading higher after bouncing in extreme oversold levels, while the price is still below a bearish 20 SMA, now capping the upside around 1.4640, where the pair has also set several intraday highs and lows this week, and therefore the level to break to confirm further gains.
Support levels: 1.4570 1.4535 1.4500
Resistance levels: 1.4640 1.4685 1.4730
USD/JPY Current price: 117.60
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The Japanese yen advanced against all of its major rivals, with the USD/JPY pair down to 117.32, favored by safe-haven demand triggered by Chinese stocks' decline. The pair has attempted recovering some ground, but met selling interest around 118.30 and maintains a persistent bearish tone, with the noted exception that the ongoing trend may be interrupted by the release of US Nonfarm Payroll data this Friday. Technically, the 1 hour chart shows that the technical indicators have briefly advanced above their mid-lines before resuming their declines, and now head lower within negative territory, whilst the price remains well below bearish moving averages. In the 4 hours chart, the technical indicators have turned back lower well below their mid-lines after correcting oversold readings, supporting some further declines, but probably limited ones, during the upcoming Asian session.
Support levels: 117.25 116.80 116.50
Resistance levels: 117.90 118.40 118.80
AUD/USD Current price: 0.7000
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The AUD/USD pair edged sharply lower, and fell to a daily low of 0.6980 before bouncing some, still unable to settle above the 0.7000 level. Risk sentiment coming from China keeps the Aussie subdued, and the currency is unable to recover ground, even despite a strong advance in gold prices. Down by over 300 pips ever since the week started, the pair risk a test of the multi-year low posted last September at 0.6906, with scope to fall even lower, if the greenback resumes its early year strength. Technically and for the short term, the bias is bearish in the 1 hour chart, as the intraday recoveries were capped by a bearish 20 SMA, now around 0.7020, while the technical indicators have retreated from near their mid-lines and head slightly lower. In the 4 hours chart, the RSI indicator has turned lower within extreme oversold levels, while the Momentum indicator hovers near oversold territory, as the 20 SMA extended its decline above the current level.
Support levels: 0.6980 0.6955 0.6905
Resistance levels: 0.7000 0.7040 0.7075
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