EUR/USD: more consolidation, all eyes on Yellen
|EUR/USD Current price: 1.1268
There were no major developments across the forex board this Wednesday, as the market is waiting for FED's Yellen speech in the upcoming Jackson Hole Symposium, starting this Thursday. The dollar closed the day mixed, with the EUR/USD pair declining to fresh weekly lows of 1.1244, before recovering modestly, closing the day at its lowest in over a week. The decline lost steam after the release of worse-than-expected US data, as existing home sales decline in Jul by 3.2% to a seasonally adjusted annual rate of 5.39 million from 5.57 million in June.
The short term picture for the pair is bearish, with the 1 hour chart showing that the price has extended below all of its moving averages, and particularly the 20 SMA accelerating its slide, currently acting as a dynamic resistance at 1.1280. In the same chart, technical indicators have resumed their declines within negative territory and after correcting oversold readings, in line with a bearish continuation. In the 4 hours chart, the 20 SMA has turned south well above the current level, while the technical indicators have lost their bearish strength, but remain within negative territory.
Support levels: 1.1245 1.1210 1.1180
Resistance levels: 1.1300 1.1340 1.3075
EUR/JPY Current price: 113.15
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The EUR/JPY pair bounced from the bottom of its recent range to close the day barely above the 113.00 figure, holding within familiar ranges as both currencies remain in wait-and-see mode ahead of Yellen. The Japanese yen, however, remains bullish, maintaining the risk towards the downside. Technically, the 1 hour chart shows that the price is below its 100 and 200 SMAs, while the technical indicators pared their recovery below their mid-lines before turning south, pointing for a retest of the 112.80 critical Fibonacci support. In the 4 hours chart, the price is a handful of pips below a bearish 100 SMA, while indicators head nowhere within bearish territory, also in line with further slides ahead.
Support levels: 112.80 112.40 112.00
Resistance levels: 113.30 113.75 114.05
GBP/USD Current price: 1.3230
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The Pound outperformed its major rivals, rallying up to 1.3272 against the greenback during the US afternoon. In the UK, the release of the BBA report showed that mortgage borrowing was unaffected by the Brexit, as net mortgage borrowing is 3% higher than a year ago. The number of home loans issued was of 37.662K against 38.500K expected, against a downwardly revised 39.73K in June. Despite the report is not usually a big market mover, it helped the GBP to extend its rally this Wednesday, as it's another sign that the referendum didn't harm the economy as much as initially estimated. Holding above 1.3200, the 1 hour chart shows that the upward movement has reached a short term top and began a downward corrective move, given that the technical indicators are retreating from overbought levels, although the price remains above a bullish 20 SMA, currently around 1.3210, indicating that the downward potential is limited. In the 4 hours chart, indicators are also retreating from overbought levels, but the price is well above its 200 EMA, currently at 1.3200, while the 20 SMA heads strongly higher well below the current level.
Support levels: 1.3200 1.3160 1.3125
Resistance levels: 1.3260 1.3290 1.3320
USD/JPY Current price: 100.45
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The USD/JPY pair closed the day marginally higher at 100.46, extending its latest consolidative mode for one more day, unable to find fresh directional strength ahead of Jackson Hole. Despite disappointing US data, the greenback gathered pace against its Japanese rival, during the American session, although the pair remains contained by 100.65, a major Fibonacci resistance. Short term, the 1 hour chart shows that the price extended above its 100 SMA and briefly beyond a bearish 200 SMA before settling a handful of pips below this last, while the technical indicators continue lacking directional strength within neutral territory. In the 4 hours chart, the technical outlook remains neutral, given that the technical indicators continue heading nowhere around their mid-lines, although the risk remains towards the downside, as the price is below its moving average, and the mentioned Fibonacci level, the 50% retracement of the 2011/2015 Abenomics rally.
Support levels: 99.90 99.55 99.10
Resistance levels: 100.65 100.95 101.30
AUD/USD Current price: 0.7610
View Live Chart for the AUD/USD
The AUD/USD pair ends the day pretty much flat around 0.7610, after trading as low as 0.7788 by the end of the Asian session, still looking vulnerable towards the downside as it continues pressuring the 0.7600 level after failing to hold on to gains above 0.7700. The pair has now the potential to retest the 0.7450 level, a major Fibonacci support, the 38.2% retracement of this year early rally. In the meantime, the technical picture is neutral, with investors holding their breath ahead of more clues coming from US Yellen. In the 1 hour chart, the price is hovering around a horizontal 20 SMA, while indicators turned modestly bearish around their mid-lines, in line with a downward extension. In the 4 hours chart, the 200 EMA has advanced modestly below the current price, converging with the 0.7600 Fibonacci support, the 23.6% retracement of the mentioned rally, and reinforcing the support level, but the 20 SMA keeps capping the upside, while technical indicators hold around their mid-lines, with no clear directional strength.
Support levels: 0.7600 0.7570 0.7535
Resistance levels: 0.7640 0.7690 0.7735
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