EUR/USD: unstoppable Pound's slide driving markets
|EUR/USD Current price: 1.0979
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The dollar opened the week with a strong note, advancing against most of its rivals, but the Japanese yen, as demand for safe-haven assets persists, following Brexit's chaos triggered late Thursday. The macroeconomic calendar is quite scarce in Europe, as the region only released some minor figures on monetary developments, which were modestly positive. In the US, and ahead of Wall Street's opening, the Goods Trade Balance for May showed a deficit of 60.6 billion, worse-than-expected, and previous, but the dollar has hardly retreated afterwards.
Still pending are US June's Flash Markit Services and Composite PMIs are going to be released after the opening and a speech from ECB's head, Mario Draghi.
The EUR/USD pair trades near its daily low, set at 1.0971, and with a strong bearish tone in the short term, as in the 1 hour chart, the price is well below a bearish 20 SMA whilst the technical indicators have resumed their slides near oversold levels. The 20 SMA is now around 1.1047, providing a strong resistance in the case of a recovery. In the 4 hours chart, the technical indicators present a strong downward momentum near oversold levels, whilst the 20 SMA has extended its decline below the 100 and 200 SMAs, far above the current price. The pair has scope to extend is decline on a break below 1.0960, with market now eyeing the strong static support area between 1.0800 and 1.0840.
Support levels: 1.0960 1.0920 1.0885
Resistance levels: 1.1000 1.1045 1.1080
GBP/USD Current price: 1.3182
View Live Chart for the GBP/USD
The British Pound keeps falling strongly this Monday, having gapped sharply lower at the weekly opening against most of its major rivals, as Brexit jitters keep hitting the UK. Nearly half of the shadow cabinet has so far resigned, 10-year government bond yields sank below 1% for the first time ever, while social disarray, including some racist attacks over the weekend, reflects the levels of uncertainty over the UK future among locals.
The GBP/USD pair fell down to 1.3150, a fresh over 30-year low, temporally paring losses amid being overstretched towards the downside, but by no means aiming to change course. The 1 hour chart, shows that the price keeps developing below a strongly bearish 20 SMA, which caught up with price action early Sunday, and stands now around 1.3400, whilst the RSI indicator is flat within oversold territory and the Momentum indicator heads south below its mid-line, all of which favors further declines. In the 4 hours chart, technical indicators are heading strongly lower within extreme oversold territory, also maintaining the risk towards the downside and with no aims of changing bias any time soon.
Support levels: 1.3150 1.3110 1.3070
Resistance levels: 1.3225 1.3260 1.3300
USD/JPY Current price: 101.61
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The Japanese yen remains strong against all of its major rivals, having ignored some early market rumors suggesting the local government is ready to add another ¥10 trillion stimulus package sometime this year. The news helped the Nikkei, as the benchmark recovered some of its latest losses, up roughly 2.40% this Monday, but the yen remains quite vulnerable to risk sentiment. The USD/JPY pair trades at the lower end of its daily range ahead of the US opening, with the overall negative tone present in the short term, as in the 1 hour chart, the pair is currently developing below the 100 and 200 SMAs, whilst the technical indicators have turned lower within negative territory. In the 4 hours chart, the technical indicators present a strong downward momentum near oversold readings, whilst the 100 SMA supports a continued decline, heading sharply lower well above the current level.
Support levels: 101.40 101.00 100.75
Resistance levels: 101.95 102.30 102.80
AUD/USD Current price: 0.7393
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The Aussie starts the week under pressure, struggling to hold above 0.7400 against the greenback, and also gapping south at the weekly opening, lead by broad's dollar demand. The pair has remained contained below the 38.2% retracement of this year's rally at 0.7450 earlier in the day, and heads into the US opening with a downward tone in the short term, as in the 1 hour chart, the price develops below its moving averages, whilst the technical indicators have turned lower after failing to overcome their mid-lines. In the 4 hours chart, the technical readings present a strong downward momentum, whilst the price is struggling around a horizontal 200 EMA, indicating an increasing bearish potential that can drive the pair down to Friday's low around 0.7303.
Support levels: 0.7365 0.7330 0.7300
Resistance levels: 0.7410 0.7450 10.7490
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