EUR/USD: Central Banks keep coming

EUR/USD Current Price: 1.1109

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The  EUR/USD pair traded range-bound around the 1.1100 figure this Tuesday, unable to gain directional traction ahead of the FED's economic policy decision to be released this Wednesday. The US Central Bank is largely expected to remain on hold, but this particular meeting will include  the updated projections of its funds target rate and economic situation, whilst Janet Yellen will offer a press conference, in where speculators will be looking for clues on a date for a forthcoming rate hike. Data coming from the US earlier today was quite disappointing, as retail sales for February fell 0.1% monthly basis, below expectations, whilst the PPI for final demand fell 0.2% in the same month, seasonally adjusted. On an unadjusted basis, the final demand index was unchanged for the 12 months ended in February, with downward revisions to previous readings. 

The pair jumped up to 1.1124 following the news, after extending its weekly decline down to 1.1071, but was unable to rally and settled around 1.1100, where it stands ahead of the Asian opening. The common currency maintains a positive bias, given that with few exceptions, the dollar traded broadly higher, and EUR buyers refused to give up. The fact that the pair held suggests that speculators are still looking for higher highs. The technical picture is for the most neutral in the short term, as in the 4 hours chart, the price recovered strongly on approaches to the 1.1065 level, the 38.2% retracement of the post-ECB rally, whilst the technical indicators hover around their mid-lines, with little directional strength. The upcoming direction will depend on whether the FED is still in track of rising rates, which may see the pair down to 1.1000, or if not, which will result in a rally up to 1.1245. 

Support levels:  1.1065 1.1020 1.0980

Resistance levels: 1.1120 1.1160 1.1200 

EUR/JPY Current price: 125.55

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The Japanese yen appreciated against all of its major rivals on the back of the latest BOJ economic policy meeting, in which the Japanese Central Bank decided to remain on-hold, but left doors open for further easing. The EUR/JPY extended its decline down to 125.08, but recovered partially before the closing bell as Wall Street trimmed most of its pre-opening losses. The short term technical picture for the pair suggests that the upward corrective movement can extend, as in the 1 hour chart, the pair met buying interest around its 100 SMA, whilst the technical indicators have recovered from oversold levels, and maintain tepid bullish slopes below their mid-lines. In the 4 hours chart, the RSI indicator heads higher around 46, while the Momentum indicator has resumed its decline within bearish territory, indicating limited scope for rallies and an increasing risk of a downward move towards fresh lows. 

Support levels: 125.10 124.70 124.25

Resistance levels: 125.90 126.40 126.90

GBP/USD Current price: 1.4156

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The Sterling was hit hard by renewed concerns over a possible Brexit, as latest polls showed that voters supporting the Brexit are more willing to vote in the forthcoming referendum than those against it, giving a decisive edge to the final result. The GBP/USD pair plummeted to 1.4140 in the American afternoon, and poor US data was not even enough to give the Pound a break, given that a spike towards 1.4200 saw selling interest resuming. This Wednesday, the UK will release its latest labor market data, and the market will likely focus in wages, still far below their pre-crisis average. Wages are expected to post a modest advance, seen at 2.0% from previous 1.9%, yet if the final number disappoint, the pair may well extend its decline towards the 1.4000 level. The technical picture is clearly bearish, given that, after being rejected by the 61.8% retracement of this year's slide around 1.4440, the pair accelerated its decline below the 38.2% retracement of the same rally at 1.4210, now a critical resistance level. Also, and according to the 4 hours chart, the technical indicators head sharply lower near oversold territory, whilst the price accelerated lower after breaking below its 200 EMA, all of which supports a continued decline on a break below 1.4130, the immediate support. 

Support levels: 1.4130 1.4090 1.4050

Resistance levels: 1.4210 1.4260 1.4300

USD/JPY Current price: 113.01

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The USD/JPY pair fell down to 112.62, weighed at the beginning of the day by the BOJ, and later by soft US data. In Asia, the Japanese Central Bank decided to maintain its benchmark interest rate on hold at -0.1% and the annual purchases of financial assets at ¥80tn a year. Governor Kuroda, however, said that  more asset purchases and adjustments to its negative rate remain on the table, whilst negative rates will continue as long as needed to reach the  inflation goal of 2.0%, preventing the JPY from appreciating further. The pair managed to recover some ground in the American afternoon, struggling around the 113.00 level by the end of the session. The long term picture keeps favoring the downside, although a break below 112.10, the base of the pair's latest range, is required to confirm a steeper decline. In the 1 hour chart, the technical indicators head slightly higher well below their mid-lines, while the price is well below its 100 and 200 SMAs, both in the 113.40/50 region, maintaining the upside limited. In the 4 hours chart, the technical indicators also turned slightly higher within bearish territory, but lack momentum, with the pair most likely remaining range-bound ahead of the FOMC decision this Wednesday. 

Support levels: 112.60 112.10 111.70 

Resistance levels: 113.50 113.90 114.40

AUD/USD Current price: 0.7451

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The Australian dollar fell against its American rival, weighed mostly by commodities' weakness and profit taking ahead of the FED. The RBA released the Minutes of its latest meeting, pretty much in line with market's expectations: policy makers seem to be comfortable with the current wait-and-see stance, although maintaining the easing bias. But a line referring to " continued low inflation would provide scope to ease monetary policy further, should that be appropriate to lend support to demand,” prompted selling of the antipodean currency. In the longer term outlook, the movement seems barely corrective, as the pair retraced some 150 pips following an 800 pips rally. In the short term however, the risk has turned towards the downside, with the 1 hour chart showing that the price develops below a sharply bearish 20 SMA and that the technical indicators maintain bearish slopes within bearish territory. In the 4 hours chart, the technical indicators present a strong downward momentum and approach oversold territory, whilst the price remains near its daily low and well below a horizontal 20 SMA, in line with the shorter term outlook. 

Support levels:  0.7430 0.7390 0.7345

Resistance levels: 0.7480 0.7530 0.7580