EUR/USD: Central Banks' imbalance leading the way
|EUR/USD Current price: 1.0881
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The EUR/USD pair fell to its lowest since last March, with the common currency extending its post-ECB negative momentum below the 1.0900 level. The Central Bank left its economic policies unchanged, with Mario Draghi announcing that with fresh data, a new assessment of the situation will be make next December, which many understood as the possibility of further easing then. Given that the US Federal Reserve is expected to move in the opposite direction that month by providing a rate hike, the imbalance within Central Banks' policies is driving the pair lower. There were no relevant releases during the European morning, but during the upcoming US session, FED's Tarullo will speak, at the Columbia Law School, and the EU will release its preliminary consumer confidence index for October.
Technically, the short term picture is bearish for the pair, given that in the 1 hour chart, technical indicators have turned back south within negative territory after correcting oversold conditions. In the same chart, the 20 SMA caps the upside in the 1.0910 region, where selling interest has been containing advances ever since the pair broke lower early Europe. In the 4 hours chart, the RSI indicator keeps heading south, despite being at 24, while the Momentum indicator also presents a bearish stance well below its mid-line, supporting some further slides for today on a break below 1.0870, the immediate support.
Support levels: 1.0870 1.0840 1.0800
Resistance levels: 1.0910 1.0950 1.1000
GBP/USD Current price: 1.2191
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The GBP/USD pair broke through the 1.2200 figure ahead of Wall Street's opening and trades a few pips below the level, weighed by dollar's strength. The greenback trades higher against most of its major rivals, exception made by the JPY, favored by the poor performance of worldwide equities. As for the Pound, the UK released the public sector finances figures for September 2016, showing that the sector's net borrowing in the month came in worse-than-expected, up to £10.118B from previous £8.200B. After topping at a major static resistance level at 1.2335 earlier this week, the pair seems ready to resume its hard-Brexit-driven decline. From a technical point of view, the 20 SMA in the 1 hour chart has continuously capped the upside, now around 1.2240, while technical indicators head lower within bearish territory with uneven strength, supporting a bearish extension. In the 4 hours chart, the scenario is quite similar, with the price developing below its 20 SMA, although this one with no clear directional strength, and technical indicators accelerating their declines within negative territory.
Support levels: 1.2160 1.2125 1.2080
Resistance levels: 1.2210 1.2250 1.2290
USD/JPY Current price: 103.74
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Still contained by sellers around 104.00. The USD/JPY pair again failed to sustain gains beyond the 104.00 figure, retreating from a daily high of 104.20. BOJ's Kuroda was on the wires this Friday, and he said that the Central Bank may push back the date for hitting its inflation target, given the underlying weakness in price growth. The BOJ is scheduled to meet next November 1st. Also, an 6.6 magnitude earthquake struck Tottori Prefecture and surrounding areas, which supported the yen's strength on risk aversion. The pair trades mid-range, although in the short term the risk has turned towards the downside, as the price is developing now below its 100 and 200 SMAs, with the shortest having broke below the largest, and technical indicators presenting moderate bearish slopes within negative territory. In the 4 hours chart, technical indicators present a neutral stance, moving back and forth around their mid-lines, although a strongly bullish 100 SMA offers an immediate support around 103.25.
Support levels: 103.25 102.90 102.60
Resistance levels: 103.85 104.20 104.60
AUD/USD Current price: 0.7624
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The AUD/USD pair trades slightly lower daily basis, with an early spike up to 0.7650 having been quickly reversed. There were no relevant news affecting the pair, and despite dollar's strength, commodities are holding ground, limiting the downside in the pair this Friday. Still, the short term picture is bearish, given that in the 1 hour chart, indicators have entered negative territory, whilst the price is now breaking below a bearish 20 SMA, supporting a test of the key support at 0.7600. In the 4 hours chart, the 20 SMA has turned south above the current level, while technical indicators have resumed their slides within negative territory, extending to fresh lows and also supporting a downward extension for the upcoming sessions.
Support levels: 0.7600 0.7560 0.7525
Resistance levels: 0.7650 0.7690 0.7720
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