EUR/USD Current price: 1.1195
The EUR/USD pair closed the week in the red, although within its monthly range, still unable to set a clear directional trend. Over the past few weeks, risk sentiment and uncertainty over upcoming economic policies in both regions, has left investors between a rock and a hard place, and price's action is a clear reflection of it. FED's Yellen said last Thursday that a rate hike is still in the table for this 2015, and the latest US Q2 GDP revision resulted at 3.9%, above the previous 3.7%. But that is not enough to counteract EUR's demand as funding currency when risk aversion hits, something that has been going on already for over a month, with stocks plummeting worldwide.
During the upcoming days, market's attention will focus in the EU inflation and the US employment report, both expected to offer some clues on the health of these economies. However, risk-related sentiment will also have its saying on the forex board.
From a technical point of view, the pair has shown little progress these last few days, once again, stuck around the 1.1200 level. The daily chart shows that the price has been hovering around horizontal moving averages, with the 20 SMA now around 1.1245. In the same chart, the Momentum indicator is flat around 100 whilst the RSI is also flat right below its 50 level, in line with a neutral stance. Shorter term, the 4 hours chart shows that the price has managed to advance a few pips above its 20 SMA, whilst the technical indicators are bouncing from their mid-lines, with no actual momentum. The base of the range has been set at 1.1080, which means additional declines below it, are required to confirm a bearish continuation, while bulls may get encouraged only with an upward acceleration beyond 1.1335.
Support levels: 1.1160 1.1120 1.1080
Resistance levels: 1.1245 1.1290 1.1335
EUR/JPY Current price: 135.02
The Japanese Yen has been generally stronger, particularly in the crosses, due to the increasing demand of safe-haven assets. The fact that the BOJ has left its economic policy unchanged in its last meeting, is providing further support to the currency, although investors will likely wait for the outcome of October's meeting before resuming yen's buying, as there is some speculation the Central Bank may act then. In the meantime, the daily chart shows that the price has managed to recover above its 200 DMA on Friday, but it's still way below the 100 DMA, currently around 136.70. In the same chart, the technical indicators are hovering in neutral territory, with the RSI indicator aiming higher around 47, none suggesting an upward continuation for this Monday. Shorter term, the 4 hours chart shows that the technical indicators have partially retraced from their highs, but remain well above their mid-lines, limiting chances of a bearish breakout as long as the 134.40 support contains the downside. A break below this last however, will signal an increasing bearish potential, with the price then most likely returning to its recent lows in the 133.00/30 price zone.
Support levels: 134.40 133.90 133.30
Resistance levels: 135.35 135.80 136.20
GBP/USD Current price: 1.5180
The GBP/USD pair reached a fresh 4-month low of 1.5133 last Friday, with the following bounce being limited by selling interest around the 1.5200 level. The pair closed the week in the 1.5180 region, and is still technically bearish, despite it has closed in the red for a sixth consecutive day and the movement seems way overdone. Furthermore, there was no actual catalyst for Pound's decline beyond risk sentiment, and given the extension of the latest decline, there's an increasing risk of an upward corrective movement no, with the 1.5250 being the key, as failure around the level, will likely confirm a downward continuation towards the 1.5000 region. The daily chart shows that the pair has accelerated its decline after breaking below a now bearish 20 SMA, whilst the RSI maintains its bearish slope, nearing oversold readings. The momentum indicator however, turned flat below the 100 level. In the 4 hours chart, the 20 SMA heads lower around 1.5260, the Momentum indicator aims higher, but below the 100 level, and the RSI indicator remains steady near oversold readings, all of which maintains the risk towards the downside, for this Monday.
Support levels: 1.5150 1.5120 1.5070
Resistance levels: 1.5215 1.5250 1.5290
USD/JPY Current price: 120.58
The USD/JPY pair rallied up to 121.23 last Friday, as Yellen's words late Thursday brought some relief among stocks traders. Indexes traded generally higher in Europe, while US ones started the day with a strong positive tone, fueling USD/JPY demand. Stocks momentum however, faded over the day and so did the pair, which ended the day with gains anyway, around the 120.60 level. The pair has maintained its range for one more week, clearly limited by Fibonacci levels, as buyers have surged on approaches to 119.35, the 38.2% retracement of the 124.56/11613 decline, whilst sellers cap around the 61.8% retracement of the same rally at 121.35. In the daily chart, the pair has been developing well below its 100 and 200 DMAs, with the largest converging with the Fibonacci resistance at 122.35, which has clear bearish implications. The technical indicators in the same chart, held around their mid-lines, with no clear directional strength. In the 4 hours chart, the technical indicators head lower above their mid-lines, increasing the risk of a short term bearish continuation, to be confirmed on a break below 120.35, the 50% retracement of the same rally and the immediate support.
Support levels: 120.35 120.00 119.70
Resistance levels: 121.05 121.35 121.65
AUD/USD Current price: 0.7025
The AUD/USD pair edged lower last week, closing it at 0.7025 after being as low as 0.6938, resuming the dominant bearish trend. The Aussie has been weighed by a steady decline in commodities' prices and the increasing concerns over a Chinese economic slowdown. With a few macroeconomic readings scheduled in the country for this week, the pair will likely continue trading on sentiment, with strong bearish implications for the Aussie. Technically, the daily chart shows that the price has broken below its 20 SMA, although the Momentum indicator is posting a tepid bounce from its mid-line, and the RSI indicator aims higher around 40, limiting the downward potential at the time being. In the 4 hours chart, the price is hovering around a bearish 20 SMA, whilst the Momentum indicator aims higher around its 100 level and the RSI indicator hovers around 46, in line with the daily outlook. To the upside, however, the price needs to recover above a strong static resistance around 0.7110, being then able to attract further demand.
Support levels: 0.6990 0.6955 0.6906
Resistance levels: 0.7035 0.7070 0.7110
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