EUR/USD: Dovish FOMC, as expected

EUR/USD Current Price: 1.1147

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The EUR/USD pair extended its decline to 1.1105 in another lackluster journey for the common currency that traded in quite a limited range for most of the day. European stocks traded higher, putting some pressure over the common currency, whilst the US released some encouraging inflation data, as the PPI for final demand rose 0.1% in January compared to December 2015, while yearly basis declined by -0.2%, well above the -0.6% decline expected. Overall soft, data at least signals that weakness is moderating. Housing data was mixes, with Housing starts down to 1.1M in January, but with Building Permits resulting better-than-expected at 1.20M

The US Federal Reserve released the minutes of its January meeting late in the US afternoon, and as expected, the tone was broadly balanced.  According to the Minutes, most officials saw a solid 2016 job's market, but for a number of them, inflation's outlook is more uncertain. The document also expressed some concerns on how Chinese economic slowdown may affect the US economy. 

The market barely reacted to the news, with the USD trading for the most, 10 pips lower against its major rivals. The technical picture for the EUR/USD pair is still showing weakness in the common currency, given that the pair continues setting lower lows daily basis. Shorter term, the 4 hours chart shows that the price met selling interest around a still bearish 20 SA, currently around 1.1180, while the technical indicators are heading higher, but below their mid-lines, showing little buying interest at current levels. Above the mentioned SMA the pair may recover further ground this Thursday, particularly if investors' mood remains positive, yet 1.1300 seems too far away at the time being, with a high risk of further declines on renewed selling interest below the 1.1120 level. 

Support levels: 1.1120 1.1080 1.1045 

Resistance levels: 1.1180 1.1230 1.1275

EUR/JPY Current price: 127.11

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The EUR/JPY pair traded uneventfully around the 127.00 level for most of these past few sessions, as both the EUR and the JPY, weakened against the greenback. Nevertheless, the yen maintains its background strength, as despite a strong improvement in markets' mood ever since the European opening, the Japanese currency barely eased. Technically, and for the short term, the 1 hour chart for the EUR/JPY shows that the price remained capped by its 100 SMA, currently around 127.30, while the technical indicators stand flat in neutral territory. In the 4 hours chart, the price remains well below its moving averages, while the technical indicators have turned slightly lower right below their mid-lines, lacking strength, but maintaining the risk towards the downside.  

Support levels: 126.65 126.30 125.85 

Resistance levels: 127.30 127.60 128.15

GBP/USD Current price: 1.4287

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The GBP/USD pair traded as low 1.4234 this Wednesday, having been unable to sustain gains beyond the 1.4300 level, achieved after the release of December's UK labour data. According to the official release, employment was up in the three months to January by 205,000 to record 74.1% of workforce. The unemployment rate however, remained unchanged at 5.1% against expectations of a fall to 5.0%, while wages posted a tepid advance, still subdued. For this Thursday, David Cameron, the British prime minister, is expected to announce the referendum vote, probably for June 23, which will likely produce negative effects over the GBP at least in the short term.  In the meantime, the price is stuck around the daily ascendant trend line that the pair broke yesterday, unable to confirm a downward continuation in the short term, given that in the 1 hour chart, the price is hovering around a horizontal 20 SMA, while the technical indicators head nowhere around their mid-lines. In the 4 hours chart, the 20 SMA maintains a strong bearish slope well above the current level, the Momentum indicator has bounced from oversold levels, but the RSI indicator heads back south after correcting slightly higher, all of which supports some further declines, particularly on a break below 1.4250. 

Support levels: 1.4250 1.4210 1.4170

Resistance levels: 1.4325 1.4370 1.4410 

USD/JPY Current price: 114.16

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The Japanese yen managed to gain some ground during the first half of the day, in spite local share markets closed in the red this Wednesday. The pair extended its rally in the American session up to 114.49, on improved US data, but the advance was for the most shallow. Negative rates became effective in Japan, as the overnight rate dropped below zero for the first time in more than a decade, down to -0.002% the lowest since November 2004. Technically, the USD/JPY spent most of the past session consolidating above the 114.00 level, presenting a neutral-to-bearish stance in the short term, as in the 1 hour chart, the price was contained between the 100 and 200 SMAs, with the shortest offering support around 113.50 and the largest capping the upside around the mentioned daily high. In the same chart, the technical indicators remain above their mid-lines, but lack directional strength, while in the 4 hours chart, the technical indicators turned south after a limited bounce from their mid-lines, as the price remains well below its moving averages, favoring additional declines on a break below the mentioned 113.50 region.

Support levels: 113.90 113.50 113.10

Resistance levels: 114.50 114.85 115.20 

AUD/USD Current price: 0.7169

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The Australian dollar recovered its shine, surging towards 0.7181 against the greenback, as oil prices recovered the ground lost on news Iran said it supports the output freeze discussed by other oil producers in Qatar earlier this week.  During the upcoming Asian session, Australia will release its January employment figures, expected to show 15K new jobs added in the month, while the unemployment rate is expected to remain steady at 5.8%. The release of US FOMC Minutes sent the pair slightly lower, although it holds on to gains daily basis. Short term, the 1 hour chart shows that the price is well above a bullish 20 SMA, but that the technical indicators have turned slightly lower from near overbought readings, in line with a downward move. In the 4 hours chart, the price is well above its moving averages, but the technical indicators remain flat around their mid-lines, with not enough strength to confirm additional gains beyond 0.7200 at the time  being. 

Support levels: 0.7150 0.7110 0.7070

Resistance levels: 0.7190 0.7240 0.7285