EUR/USD: higher on risk, but gains seen temporal

EUR/USD Current price: 1.0868

The common currency trades at its highest for the week against the greenback this Thursday, as the markets are again being driven by sentiment. Chinese stocks plummeted, leading to the second early halt in trading of the week, and dragging European stocks lower, something that ended favoring the EUR. Early data released in Europe was mixed, with November Retail Sales falling 0.3% monthly basis, but improved market's sentiment in December, according to the latest confidence indicators. The pair advanced up to 1.0874 so far today, and consolidates nearby ahead of the US opening. Technically, the EUR/USD 1 hour chart shows that the price is below the 200 DMA, while the technical indicators have lost their bullish strength in overbought territory. Also in the 1 hour chart, the price is well above a bullish 20 SMA and the 38.2% retracement of the December rally at 1.0845, indicating some additional gains for the upcoming hours. In the 4 hours chart, the pair is also above its 20 SMA that anyway maintains a bearish tone, whilst the technical indicators head north above their mid-lines, supporting the shorter term view.

Support levels: 1.0845 1.0800 1.0750

Resistance levels: 1.0890 1.0920 1.0960

GBP/USD Current price: 1.4575

View Live Chart for the GBP/USD

The GBP/USD pair fell to a fresh 5-year low of 1.4532 before bouncing amid extreme oversold conditions, but still trading in the red. There were no fundamental releases in the UK that affected the Pound, with the currency easing on mounting speculation over the result of the upcoming Brexit referendum. Technically, the 1 hour chart shows that the 20 SMA has extended its decline further, above the current price, while the technical indicators are correcting oversold readings, but far from suggesting some further advances. In the 4 hours chart, the technical indicators are consolidating in oversold territory, while the price is below a bearish 20 SMA, currently around 1.4660 and the level to overcome to revert the ongoing bearish tone.

Support levels: 1.4535 1.4500 1.4470

Resistance levels: 1.4620 1.4660 1.4700

USD/JPY Current price: 117.61

View Live Chart for the USD/JPY

Bearish potential increases, 116.10 possible. Another round of risk aversion triggered by China sent the USD/JPY down to 117.32, the lowest since Chinese Black Monday late August. The Yen's strength accelerated, and the pair trades in the red for a fourth consecutive day, which leaves the daily technical indicators in oversold territory, although still heading south and supporting some further declines. In the shorter term, the 1 hour chart the price has been consolidating below 117.70 and the moving averages have accelerated their declines well above the current level, whilst the technical indicators are heading lower near oversold levels. In the 4 hours chart, the technical indicators have stalled their declines around oversold readings, not yet confirming further advances. The technical picture is clearly bearish, but the US will release its Nonfarm Payroll report this Friday, which may interrupt, at least temporally, the ongoing JPY strength.

Support levels: 117.25 116.80 116.50

Resistance levels: 117.90 118.40 118.80

AUD/USD Current price: 0.6087

View Live Chart for the AUD/USD

The AUD/USD pair fell down to 0.6980 this Thursday and trades a few pips above the level, unable to recover ground. Weighed by Chinese woes, the Aussie is now biased lower against its American rival, given that the pair has broken below the 0.7000 figure, and the 1 hour chart shows a strong bearish Momentum, while the RSI indicator stands flat around 27. In the 4 hours chart, the technical indicators have partially lost their bearish strength in oversold levels, maintain the risk towards the downside and exposing the 0.6906 multi-year low posted last September

Support levels: 0.6980 0.6955 0.6905

Resistance levels: 0.7000 0.7040 0.7075

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