EUR/USD: no strength, led by oil again

EUR/USD Current Price: 1.0874

The EUR trades slightly higher this Monday, rather finding support in falling oil prices than anything else. The commodity eases as news earlier in the day, spurred risk aversion as the release of the Chinese official PMI survey for manufacturing slipped to 49.4 in January, from 49.7 the month before and short of forecasts of 49.6. In Europe, local PMIs came out mixed, as the German reading resulted at 52.3 against the 52.1 expected and below the 53.2 final December reading. The EU figure matched expectations at 52.3, also below the 53.2 printed in December. US Personal Income rose in December, but spending remained flat, doing little for the greenback across the board.

Technically, the 1 hour chart for the EUR/USD pair shows that the price is unable to advance beyond its 100 SMA, although the 20 SMA heads higher below the current level, while the technical indicators lose upward steam in positive territory. In the 4 hours chart, the price is now below its moving averages, while the Momentum indicator has been rejected from its mid-line, while the RSI indicator hovers around neutral territory. The downside is limited, although the pair lacks strength to advance further. Above 1.0890, the outlook will be more constructive, with 1.0930/60 as the probable bullish target should the greenback come under pressure.

Support levels: 1.0845 1.0810 1.0770

Resistance levels: 1.0890 1.0925 1.0960

GBP/USD Current price: 1.4294

View Live Chart for the GBP/USD

The GBP/USD pair advanced some at the beginning of the week, but is unable to recover the 1.4300 level, in spite the UK Markit manufacturing PMI for January reached a 3-nth high of 52.9. The short term picture is slightly positive, as the price holds above a bullish 20 SMA, and the technical indicators above their mid-lines, although losing upward strength. In the 4 hours chart, however, the technical picture is mostly neutral as the price is struggling around a flat 20 SMA, while the technical indicators are turning lower around their mid-lines.

Support levels:1.4260 1.4220 1.4180

Resistance levels: 1.4310 1.4350 1.4400

USD/JPY Current price: 121.28

View Live Chart for the USD/JPY

Consolidating at highs. The USD/JPY pair seems unable to attract investors this Monday, confined to a tight 40 pips range ever since the day started. The background trend, however, is bullish ever since the BOJ shocked markets by announcing negative deposit rates, as in the 1 hour chart, the price holds steady near its highs, while the technical indicators have corrected extreme overbought readings and the 100 and 200 SMAs advanced below the current level. In the 4 hours chart, the technical indicators are still in extreme overbought territory, with very limited bearish slopes. The main support comes at 120.60, the 61.8% retracement of its latest daily decline, and approaches to the level may attract buying interest. Above the 121.70 region on the other hand, the pair can extend its rally pass 122.00, particularly if upcoming US data results more encouraging that the income and spending figures.

Support levels: 121.00 120.60 120.15

Resistance levels: 121.70 122.10 122.40

AUD/USD Current price: 0.7068

View Live Chart for the AUD/USD

The Australian dollar is also in a consolidative phase against the greenback, with the pair stuck around the 50% retracement of its latest daily decline. Weakening commodities, however, turn the risk towards the downside. Technically, the 1 hour chart shows that the technical indicators have turned south, but lack strength in neutral territory, while the price is moving back and forth around a flat 20 SMA. In the 4 hours chart, the price is hovering around the 20 SMA and the 200 EMA, both converging in the 0.7060 region, while the technical indicators are going nowhere around their mid-lines. A downward acceleration below the 0.7060, particularly if oil's prices continue to fall, may see the pair approaching the 0.7000 region by the end of the US session.

Support levels: 0.7060 0.7020 0.6980

Resistance levels: 0.7105 0.7150 0.7190

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