EUR/USD back above 1.1000, but upside limited

EUR/USD Current Price: 1.1024

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After hitting fresh highs versus the euro and the pound during the European session, the US dollar gave up most of its early gains as it took a hit from disappointing economic data. US Markit services PMI fell to 49.8 in February, below the 53.5 expected while the composite PMI also fell to 50.1 from 53.2 in January. Meanwhile, new home sales dropped by 9.2% in January, much more than the expected fall of 4.4%.

EUR/USD bounced from a 3-week low of 1.0957 and regained the 1.1000 level, erasing almost completely intraday losses. However, the pair lacked momentum to extend the recovery beyond the 1.1025 zone and settled just below that level. Technically speaking, EUR/USD maintains the short-term negative perspective, with spot capped below the 20-SMA in the 4 hours chart and indicators attempting bounces below their mid-lines. The negative outlook seems stronger in the daily chart as per indicators heading lower, but a decisive break below 1.0960, Fibonacci 61.8% of 1.0710/1.1376 ascend, to confirm bearish resumption of pullback from 1.1376 and expose 2016 lows.

Support levels: 1.0960 1.0900 1.0880

Resistance levels: 1.1050 1.1090 1.1140

GBP/USD Current price: 1.3917

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The British pound extended losses into a third consecutive day on Wednesday and scored a fresh 7-year low of 1.3877 during the European session amid uncertainty surrounding UK referendum on EU membership and fears of a ‘Brexit’. Even though GBP/USD managed to recover from lows as the greenback weakened during the New York session, the downside remains favored according to short-term charts. In the 4 hours chart, the pair hovers well below a bearish 20-SMA while indicators attempt to recover from lows. However, the RSI remains in oversold territory in 4 hours and daily charts, suggesting the pound might enjoy a phase of consolidation and even stage a mild bounce before resuming the fall. A break below 1.3850 would pave the way toward next target at 1.3652, which is the March 2009 monthly low.

Support levels: 1.3850 1.3800 1.3700

Resistance levels: 1.4000 1.4080 1.4155 

USD/JPY Current price: 111.48

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USD/JPY edged lower on Wednesday and hit fresh 2-week lows during the American session on the back of disappointing US data, although the decline stalled a few pips ahead the 111.00 level and its 2016 low set at 110.97 earlier this month. A late recovery in US stocks helped USD/JPY to trim daily losses but the upside remained limited with the overall picture still bearish. In the 1 hour chart indicators head higher, reflecting the recent bounce, but hold in negative territory. In the 4 hours charts, indicators hover well below their mid-lines and the RSI corrects from oversold conditions, while the 20-SMA maintains the upside limited around 112.30. It will take a clear break below 111.00 to confirm a steeper decline with the 110.10/00 zone as immediate target. On the other hand, USD/JPY needs to regain the 113.50 zone to ease the immediate bearish pressure.

Support levels: 110.97 110.10 109.20

Resistance levels: 112.25 113.05 113.50 

AUD/USD Current price: 0.7202

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The Australian dollar began the day on the back foot, weighed by the risk-off environment, although it managed to take back most of its daily losses against the greenback during the American afternoon. AUD/USD benefited from a bounce in oil and stocks and climbed back above 0.7200. From a technical point of view, short-term perspective favors the upside although indicators have lost upward strength in the 1 hour and 4 hours charts. As long as the 0.7150 support area holds, focus remains on the upside, with the 0.7260 area as immediate target followed by 0.7300. On the other hand, a fall below 0.7150 would threaten the positive bias.

Support levels: 0.7150 0.7100 0.7070

Resistance levels: 0.7260 0.7280 0.7300