EUR/USD: dollar fights back but market cautious ahead of Trump

EUR/USD Current price: 1.0509

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Following a consolidative phase across the board, the dollar is stronger ahead of the US opening, with the EUR/USD breaking below the 1.0500 level for the first time this week. There were no macroeconomic releases in Europe, but the dollar got a boost from a weaker Pound that briefly fell below the 1.2100 mark. Also, stocks are modestly higher in Europe, as market's sentiment continues to improve. A generally cautious mood prevails ahead of the upcoming speech of Donald Trump, the first contact with the press since July last year.

Technically, the 1 hour chart, shows that the price is developing below all of its moving averages, with the 20 SMA extending its decline below the 100 SMA, maintaining the risk towards the downside. The RSI indicator in the mentioned chart hovers around 33, while the Momentum ticked higher within bearish territory, as the price bounced modestly from its daily low of 1.0493,but overall, the risk remains towards the downside. In the 4 hours chart, technical indicators gained some moderate bearish strength within negative territory, with the 20 SMA gaining downward strength well above the current level, supporting the shorter term outlook.

Support levels: 1.0490 1.0445 1.0410

Resistance levels: 1.0530 1.0565 1.0600

GBP/USD Current price: 1.2111

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The GBP/USD pair extended its decline to 1.2095 this Thursday, still undermined by fears over the upcoming Brexit. Data coming from the UK this morning was mixed, with manufacturing production up by 1.3% when compared to the previous month, and by 1.2% yearly basis, whilst industrial production was up by 2.1% in  the month, and 2.0% YoY, much better than market's forecasts. Still, the positive figures did little for the GBP, while the November Trade Balance showed a larger-than-expected deficit  of £12.163B. Short term, the 1 hour chart shows that the price has extended below a bearish 20 SMA, while technical indicators head modestly lower within negative territory, favoring further slides towards the 1.2080 region, a strong static support. In the 4 hours chart, the Momentum indicator diverges with price action, recovering steadily within bearish territory, but the RSI heads north around 30 and the 20 SMA accelerate its decline, capping the upside around 1.2160, also favoring a new leg lower for the upcoming hours.

Support levels: 1.2080 1.2050 1.2010

Resistance levels: 1.2140 1.2185 1.2220

USD/JPY Current price: 116.19

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The USD/JPY pair trades modestly higher this Thursday, although still unable to rally beyond the 116.00 level, despite trading a few pips above it at the time being. As the market awaits for Trump, the USD/JPY pair consolidates around its 100 SMA in the hourly chart, whilst technical indicators turned south within positive territory, indicating a limited upward potential despite the positive tone surrounding stocks. In the 4 hours chart, the pair maintains a bearish tone, as technical indicators keep heading south within negative territory, although a modestly bullish 200 SMA continues to attract short term buying interest around 115.95. At this point, the pair needs to extend below this confirm a downward move towards the 115.20 region.

Support levels: 115.95  115.60 115.20

Resistance levels: 116.40 116.85 117.20

AUD/USD Current price: 0.7377

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The Australian dollar maintained the positive tone overnight, advancing up to 0.7395 against the greenback, its highest in four weeks, amid a continued advance in base metals. Gold recovery extended to $1,190.00 a troy ounce this Wednesday, with the commodity at its highest in six weeks.  Having retreated modestly, the AUD/USD pair 1 hour chart shows that the price is stuck around the 61.8% retracement  of its latest daily decline, but that the positive tone persists, as indicators hold within positive territory, whilst the 20 SMA leads the way higher, heading north below the current level. In the 4 hours chart, technical indicators have retreated modestly from overbought readings, but remain well above their mid-lines, whist the 20 SMA accelerated its advance below the current level, crossing above the 200 EMA in the 0.7340 region, a major support for the upcoming hours.

Support levels: 0.73430 0.7300 0.7260

Resistance levels: 0.7410 0.7450 0.7490