EUR/USD: nearing key support with no momentum

EUR/USD Current Price: 1.0858

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The common currency extended its modest decline against the greenback to 1.0833 this Tuesday, following more signs of a global economic slowdown. Manufacturing PMI surveys were tepid all across the globe, although US data was a bit more encouraging. In China, the official manufacturing PMI survey declined by 0.4 point to 49.0 in February reaching its lowest level since November 2011, while the EU reading fell to a 12-month low in February of 51.2 against previous 52.3. The rest of the major European economies, with the exception of Germany, printed readings below expectations, and neared the 50.0 mark. The only positive news came from Germany, as unemployment in the country decrease by 10,000 in February, leaving the unemployment rate unchanged at 6.2%. In the US, the ISM manufacturing index rose to 49.5 from 47.8 in January, still in contraction territory, while construction spending rose 1.5% in January, with increases in private and public spending. 

The EUR/USD pair, however, was unable to attract  investors,  slowly sliding towards the mentioned daily low, weighed by speculations the ECB may take some aggressive easing measures in its March meeting. Technically, the 4 hours chart shows that the price has bounced some from the mentioned low, while the Momentum indicator heads higher within bearish territory, recovering from oversold readings. The fact that price did not follow the indicator suggests that bears are still in control. In the same chart, the RSI indicator consolidates near oversold readings, whilst the 20 SMA maintains a sharp bearish slope above the current level, all of which supports a test of the critical 1.0800/10 region, where buyers have been defending the downside pretty much since last December. Should the pair trigger the large stops suspected below this region, the decline will likely extend towards the 1.0700 region.

Support levels: 1.0810 1.0770 1.0730

Resistance levels: 1.0890 1.0925 1.0960 

EUR/JPY Current price: 124.64

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With the EUR in neutral mode, and the Japanese yen weakening on slightly firmer US yields and  rising equities, the EUR/JPY pair advanced towards the 124.00 region, having erased most of its Monday losses. Quoting near its daily high of 123.85, the pair is short term bullish, as in the 1 hour chart, the price extended above its 100 SMA, whilst the technical indicators are partially losing their upward strength, but remain near overbought levels. In the 4 hours chart, an upward continuation is still to be confirmed, most likely with an upward acceleration beyond last week high around 125.00, as the Momentum indicator heads higher, but below the 100 level, while the RSI seems more constructive, advancing at 52. In this last time frame, the 100 SMA has accelerated further below the 200 SMA, with the shortest around 125.90, too far away to be relevant this Wednesday. 

Support levels: 123.40 122.80 122.35

Resistance levels: 124.10 124.55 125.00

GBP/USD Current price: 1.3967

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The Sterling advanced for a second day in-a-row, although the GBP/USD pair is ending the day below the daily high set at 1.4017 during the European session. The pair gave back its gains following the release of February's manufacturing PMI that fell more than expected to 50.8, against market expectations of a slight decline to 52.2, the lowest reading since early 2013. Nevertheless, intraday buying interest surged on approaches to the 1.3900 level, suggesting bears have lost interest at current levels. Short term, the pair presents a mild bullish tone, as in the 1 hour chart, the price has managed to recover above a bullish 20 SMA, whilst the technical indicators have bounced from their mid-lines, indicating the pair may continue advancing. In the 4 hours chart, the price has bounced several times from a horizontal 20 SMA, whilst the technical indicators are currently advancing above their mid-lines, in line with the shorter term perspective. Nevertheless, it would take an upward acceleration beyond the 1.4020 level to see a more sustainable advance during the upcoming hours that can extend up to the 1.4100 region.  

Support levels: 1.3960 1.3920 1.3875

Resistance levels: 1.4020 1.4060 1.4100

USD/JPY Current price: 114.01

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The American dollar outperformed against the Japanese yen, as the pair advanced a couple of pips beyond the 114.00 level in the American afternoon, supported by rising stocks worldwide. The pair traded as low as 112.15 this Tuesday, down at the beginning of the day as Monday's negative mood favored safe-haven assets. Anyway, the price is currently at a major resistance level, and some consolidation should be expected, as the current region stands for the past two sessions highs. Still far below the 38.2% retracement of its latest daily decline at 115.05, the daily chart shows that the technical indicators have turned higher around their mid-lines, rather reflecting this daily gain than suggesting further advances. In the shorter term, the price has accelerated well above its moving averages, with the 100 SMA crossing above the 200 SMA, and at the same time, the technical indicators are giving some signs of exhaustion within oversold territory. Nevertheless, with the pair pressuring its daily high, a new leg higher may follow after some consolidation. In the 4 hours chart, the technical indicators diverge from each other, with the Momentum heading lower and the RSI higher, both above their mid-lines.

Support levels: 113.50 113.15 112.60

Resistance levels: 114.10 114.60 115.00

AUD/USD Current price: 0.7162

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The  Australian dollar advanced to a fresh weekly high of 0.7191 against the greenback, holding on to gains by the end of the day. Earlier this Tuesday, the  RBA left rates on hold at 2.0% and the following statement was broadly in line with market's  expectations and was even perceived as relatively hawkish, especially considering the stable inflation outlook. Still far from its recent highs, the technical outlook is bullish, as in the 1 hour chart, the price has quickly recovered on brief dips below a bullish 20 SMA, whilst the technical indicators have turned higher after a limited downward move, well above their mid-lines. In the 4 hours chart, the price held above its 200 EMA, while it's currently advancing above a mild bearish 20 SMA, and the technical indicators are crossing their mid-lines towards the upside. The pair has met selling interest in the 0.7240/60 region since early February, which means that the pair needs to break above this level to be able to rally further. 

Support levels: 0.7160 0.7115 0.7070

Resistance levels: 0.7210 0.7260 0.7300