EUR/USD Current Price: 1.0805
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The ECB had its economic policy meeting this Thursday, and as largely expected, left rates unchanged. The EUR/USD remained muted around the 1.0900 level ahead of Draghi's speech, but once he delivered, the common currency plunged: Draghi said that rates will remain at current, or lower levels for an extended period of time, while repeatedly stated that the Central Bank will likely review its policy next March. Additionally, he remarked that downside risk has increased again. The EUR/USD pair plummeted to 1.0770, dipping briefly below the 50% retracement of the December rally, with the following bounce so far remaining capped by 1.0815. Trading around the base of its latest range, the 1 hour chart shows that the technical indicators are bouncing from oversold territory, but also that the price is well below its moving averages. In the 4 hours chart, the technical indicators are finally showing some directional strength, heading south below their mid-lines, whilst the price has moved away from its moving averages that anyway remain all together and lacking directional strength. Stocks are currently bouncing, which helps keeping the EUR under pressure. Nevertheless, oil and risk aversion continue being the main market mover, and unless a clear technical breakout below the mentioned low, the return of risk related trading will probably see the pair recover the lost ground.
Support levels: 1.0770 1.0735 1.0710
Resistance levels: 1.0840 1.0885 1.0925
GBP/USD Current price: 1.4096
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The GBP/USD pair accelerated its decline ahead of the ECB decision, breaking below the 1.4100 level for the first time since March 2009, down to 1.4078. The former bounce was not enough for the pair to regain firmly the 1.4100 figure, and the pair maintains a short term bearish tone, given that in the 1 hour chart, the price has extended below its 20 SMA while the technical indicators hover near oversold territory. In the 4 hours chart, the bearish momentum remains quite strong, while the 20 SMA continues capping the upside and attracting selling interest, now around 1.4190. Should the mentioned low give up, the pair has scope to test the 1.4000 figure, particularly if dollar's broad strength extends during the US session.
Support levels: 1.4080 1.4033 1.4000
Resistance levels: 1.4145 1.4190 1.4230
USD/JPY Current price: 117.18
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Correcting higher, but still bearish. The USD/JPY pair advanced u to 117.43 as the EUR plummeted and stocks gained, holding within positive territory daily basis amid renewed dollar's demand. The upside however, is still seen limited, at least in the short term, given that in the 1 hour chart, the price is currently unable to advance beyond a bearish 100 SMA, while the earlier spike stalled right below the 200 SMA. In the same chart, the Momentum indicator continues heading lower below its 100 level, while the RSI advances around 56, suggesting some increasing buying interest. In the 4 hours chart, the negative tone persists, given that the price is far below its moving averages that maintain strong bearish slopes, while the technical indicators hover directionless within negative territory. The high set on Wednesday at 117.46 is the level to beat to confirm additional intraday gains, whilst below 116.90, the pair will likely resume its bearish trend and retest the low set at 115.95.
Support levels: 116.90 116.40 115.95 115.50
Resistance levels: 117.45 117.70 118.00
AUD/USD Current price: 0.6919
View Live Chart for the AUD/USD
The AUD/USD pair is trading above the 0.6900 figure, recovering alongside with commodities. Despite Chinese shares traded under pressure for most of the day, Draghi changed market's mood with his dovish stance. Its yet to be seen if investors could extend the ongoing positive sentiment beyond the short term. Anyway, the short term picture for the pair is mild positive, as the price is advancing above a bullish 20 SMA, although the technical indicators lack enough momentum to confirm a stronger advance. In the 4 hours chart, the price is above a mild bullish 20 SMA, the RSI indicator hovers around 52 and the Momentum indicator heads lower above 100, all of which should keep the upside limited.
Support levels: 0.6900 0.6860 0.6825
Resistance levels: 0.6960 0.7000 0.7040
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