EUR/USD: BOJ saving the day for the greenback?

EUR/USD Current Price: 1.1293

The EUR/USD pair retreats from a daily high posted at 1.1341, in quite a nervous environment across the board, compliments to Mrs. Yellen from the FED. This Wednesday, the US Central Bank joined its worldwide counterparts in the perspective of a doom economic future, with a much more dovish-than-expected statement after the two-day meeting, indicating the possibility of just two rate hikes for this 2016. The dollar entered a selling spiral that extended during the Asian and European sessions, resulting in the USD/JPY pair falling to its lowest since October 2014. Current dollar advance is a consequence of the sharp over 100 pips bounce in the USD/JPY, with strong rumors of a BOJ's intervention, although no official comments on that.

Nevertheless, the EUR holds on to gains as European equities plummet, now trading right below the 1.1300 level. The downward move can extend in correction mode, albeit demand for the greenback will likely remain limited. Short term the 1 hour chart shows that the technical indicators are correcting extreme overbought readings, with the RSI still around 72. In the same chart, the 20 SMA maintains a strong bullish slope in the 1.1245 region the immediate support. In the 4 hours chart, the downward potential remains limited, as despite the indicators have lost their upward strength, are still within overbought territory.

Support levels: 1.1245 1.1200 1.1160

Resistance levels: 1.1310 1.1340 1.1375

GBP/USD Current price: 1.4377

View Live Chart for the GBP/USD

The GBP/USD soared up to 1.4424, following the latest BOE decision. The Central Bank has left its policy unchanged, with rates at record low of 0.5%, and all of the nine policy makers voting to keep them steady. The BOE also warned about the uncertainty surrounding a Brexit represents a downward risk for the economy in the months ahead of the vote, leading to a pullback in price. However, broad dollar's weakness prevails across the board, and the pair shows little aims to fall further. According to the 1 hour chart, the bias is higher, as the price remains well above a bullish 20 SMA, whilst the technical indicators maintain their bullish slope well into positive territory. In the 4 hours chart, the pair has managed to accelerate higher after meeting buying interest around its 200 EMA, while the technical indicators maintain their bullish slopes above their mid-lines, supporting the shorter term outlook.

Support levels: 1.4330 1.4295 1.4260

Resistance levels: 1.4410 1.4450 1.4490

USD/JPY Current price: 111.92

View Live Chart for the USD/JPY

BOJ stepping in? The USD/JPY pair recovers ahead of the US opening, from a low set at 110.66, level not seen since October 2014. Plummeting stocks and a soft dollar have supported yen's rally, but the almost 150 pips bounce has not much of a technical or fundamental base, beyond some rumors of the BOJ intervening the market. US initial jobless claims printed 265K, below market's expectations of 268K but above previous revised 258K, helping the greenback correct higher. Now flirting with the 112.00 level, the 1 hour chart shows that the price remains far below its 100 and 200 SMAs, both in the 113.30 region, while the technical indicators turned sharply higher from extreme oversold levels, now heading higher within negative territory. In the 4 hours chart, the technical indicators also bounced higher from oversold levels, but remain well below their mid-lines, far from supporting additional recoveries. Is not for sure that the Bank of Japan is acting, and is even more unlikely that this gains will sustain after this initial reaction to some jawboning. The risk remains towards the downside, and a break below the mentioned low will likely see the pair extending down to 110.00 a major psychological support.

Support levels: 111.45 111.00 110.65

Resistance levels: 112.00 112.35 112.70

AUD/USD Current price: 0.7606

View Live Chart for the AUD/USD

The AUD/USD pair rallied overnight up to 0.7650 on a mixed job report, showing that the country created less jobs than-expected, but that the unemployment rate fell down to 5.8%. The rally was also clearly supported by dollar's sell-off post FED, whilst the ongoing downward correction tracks stocks´ decline. The dominant trend is bullish, and the 1 hour chart supports the case for an upward recovery, given that the price has recovered after approaching its 20 SMA, while the Momentum indicator resumes its advance after correcting overbought readings. In the 4 hours chart, the upward momentum prevails, while the RSI retreats partially from overbought levels, all of which suggests that fresh highs are likely, once the correction is complete.

Support levels: 0.7590 0.7550 0.7520

Resistance levels: 0.7650 0.7690 0.7730

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