EUR/USD: rally to extend on Wall Street's decline

EUR/USD Current Price: 1.1565

The dollar plummeted to fresh year lows against most of its major rivals, exception made by commodity related currencies, down on different reasons. The Canadian dollar is being affected by a sharp decline in oil prices, while the AUD fell after the RBA surprised by cutting rates by 0.25% to 1.75%. The EUR/USD pair soared to a fresh 2016 high of 1.1564 following London's opening, as stocks plummeted all across Europe. Majors are being driven mostly on sentiment, as the common currency retreated once stocks pared losses.

In the macroeconomic front, data coming from the EU was pretty encouraging, as in March, industrial producer prices rose by 0.3% compared to February, when they slumped 0.7%. Compared to a year before, prices fell less than expected, -4.2% matching February's reading.

The EUR/USD pair fell around 50 pips, but it was just enough to correct overbought readings in the short term, but not to erase the bullish trend, as in the 1 hour chart, the price remains well above a bullish 20 SMA, whilst the technical indicators have corrected extreme overbought readings and are now aiming to resume their advances. In the 4 hours chart, the technical indicators have turned slightly lower, but remain in extreme overbought territory, whilst the price stands far above a sharply bullish 20 SMA, also indicating that bulls maintain the lead, despite any possible intraday downside corrective move.

Support levels: 1.1545 1.1500 1.1460

Resistance levels: 1.1565 1.1610 1.1655

GBP/USD Current price: 1.4622

View Live Chart for the GBP/USD

The GBP/USD pair traded as high as 1.4769 before plummeting to a fresh daily low of 1.4612 following the release of the UK Markit manufacturing PMI, down to 49.2 in March, its lowest in three years. The pair remains near the mentioned low, with scope to extend its decline below the 1.4600 level, as in the 1 hour chart, the technical indicators present strong bearish slopes within negative territory, whilst the price broke below its 20 SMA, now turning south around 1.4680. In the 4 hours chart, the price is currently breaking below its 20 SMA, whilst the technical indicators have accelerated their declines, and are both pointing to break below their mid-lines, also indicating the pair can extend its decline.

Support levels: 1.4605 1.4570 1.4530

Resistance levels: 1.4640 1.4680 1.4710

USD/JPY Current price: 105.95

View Live Chart for the USD/JPY

Testing BOJ's patient. The USD/JPY pair plummeted to a fresh multi-month low of 105.54, as investors seems now determinate to test BOJ's patient. The continued decline in the pair has increased the risk of a Bank of Japan intervention, but they have lost their chance during the last meeting, and any upward reaction to an intervention could be quickly reverted in the pair. In the meantime, the risk remains towards the downside, and market talks are now pointing for a test of the major psychological level of 100.00. Short term, the 1 hour chart shows that the technical indicators have corrected extreme oversold readings, but remain well below their mid-lines, whilst the 100 DMA accelerated its decline but remains far above the current level. In the 4 hours chart, the RSI indicator remains within oversold territory, while the Momentum indicator aims higher below its 100 level. Upcoming moves, however, will depend on Wall Street's tone, as if US stocks fall, the pair may well resume its decline towards fresh lows below the 105.00 level.

Support levels: 105.55 105.20 104.70

Resistance levels: 106.20 106.60 107.00

AUD/USD Current price: 0.7525

View Live Chart for the AUD/USD

The AUD/USD pair trades at fresh 4-week lows, with the Aussie pressured by the surprise decision taken by the RBA, as the Central Bank cut the key cash rates by 25 bps to a record low of 1.75% at its policy meeting this Tuesday, in a attempt to fight falling inflation. Glen Stevens offered a quite dovish statement with downbeat economic prospects, and concerns over Aussie strength. The technical picture favors additional declines, as in the 1 hour chart, the technical indicators have accelerated their declines and are about to break into oversold territory, while he price is also below its moving averages and the 0.7600 level, the 23.6% retracement of this year rally. In the 4 hours chart, technical readings are also biased lower, supporting a test of 0.7450, the 38.2% retracement of the mentioned rally during the upcoming sessions.

Support levels: 0.7510 0.7480 0.7450

Resistance levels: 0.7560 0.7600 0.7640

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