EUR/USD Current Price: 1.0916
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The Bank of Japan set the tone during the Asian session, rocking the forex board by announcing a rate cut towards negative territory, leaving the main benchmark at -0.1%. The yen plummeted, leading to some dollar's strength and some strength in crosses, although the EUR/USD pair eased towards the 1.0880 region, where buying interest halted the slide. During the European morning, news came that the EU region inflation ticked higher in December, compared to a year before, with the core reading beating expectations by reaching 1.0%. The good news are supporting the common currency, and the pair trades above the 1.0900 figure ahead of the US Q4 advanced GDP reading. Expectations are of some tepid growth during the last part of 2015, with the quarterly reading expected to print 0.8% well below the final 2.0% of the Q3. Markets already had an anticipation of weak growth news coming from the latest FOMC statement, which means the decline can be already priced in. Anyway, if the number is even worse-than-expected, the dollar will likely fall sharply.
Technically, the EUR/USD has been unable to extend beyond the 1.0950/80 region ever since the month started. Selling interest around the region has steadily rejected advances, and the pair retreated today from a daily descendant trend line coming from December high of 1.1059. It also has its 100 DMA around 1.0930 plus a Fibonacci resistance, which makes of the region a tough resistance. Above 1.0960, the pair can then rally up to 1.1000, and if this last is overcome, 1.1045 comes as the next resistance. Fresh lows on the other hand should lead to a test of the 1.0845 Fibonacci support, while below this last, the decline can extend down to 1.0800.
Support levels: 1.0930 1.0900 1.0860
Resistance levels: 1.0960 1.1000 1.1045
GBP/USD Current price: 1.4317
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The GBP/USD advanced up to 1.4412, on the back of oil's strength on Thursday, and is currently challenging the 1.4300 level amid crude's decline. The Pound has retained a generally weak tone for most of this January, but has been lately struggling to recover ground. The recent slide however, suggest that sellers are still strong, and interested to add on spikes. Technically, the pair has an ascendant trend line coming from this month low of 1.4078 around 1.4260/70, the immediate support. A positive surprise coming from the US should lead to a break below it, moreover as the technical readings have turned bearish. Below 1.4260, the pair can decline down to 1.4200/20, and even down to 1.4160 should oil's weakness extend. Above 1.4360 on the other hand, the pair can recover up to 1.4410, the daily high, whilst above this last, the 1.4450 region comes next.
Support levels: 1.4270 1.4120 1.4160
Resistance levels: 1.4360 1.4410 1.4450
USD/JPY Current price: 120.91
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The USD/JPY pair jumped around 280 pips after the BOJ announced a rate cut to negative territory, surprising the market and triggering sharp advances in JPY crosses. The daily high was set at 121.38, and hovers around the 121.00 level, meeting short term buying interest around the 61.8% retracement of its latest decline around 120.60. The 1 hour chart shows that the technical indicators have resumed their advances within overbought territory, while the 100 and 200 SMA have advanced some, but remain far below the current level. In the 4 hours chart, the technical indicators retain their bullish slope, despite being in extreme overbought territory, whilst the price has advanced sharply above its 200 SMA for the first time since mid December. A strong US GDP may fueled the advance further, with a break above the daily high sending the pair towards 121.75, and 122.10 later in the day. Below the mentioned Fibonacci support, the pair can correct towards the 50% retracement of the same rally around 119.70, where buying interest will likely maintain the downside limited.
Support levels: 121.35 121.75 122.10
Resistance levels: 120.60 120.15 119.70
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