EUR/USD: dollar poised to extend its decline

EUR/USD Current price: 1.1091

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The dollar is broadly lower against most of its major rivals, with the EUR/USD having advanced up to 1.1119 after London's opening, after the US Federal Reserve failed to provide hints over a rate hike this year. Data coming from Europe was generally positive, as unemployment in Germany declined in July, with the people out of work down by a seasonally adjusted 7K. The unemployment rate, remained steady at 6.1%. In the EU, Sentiment in July according to the European Commission, marginally improved, with only Consumer Confidence holding unchanged at -7.9. German inflation for July advanced more than expected, up by 0.3% compared to the previous month and by 0.4% on a year-on-year comparison. In the US, weekly unemployment claims came in worse than expected for the week ending July 22nd, up to 266K. The Goods Trade balance for June in the country, posted a deficit of 63.3B, worse than the -61B expected.

Technically, the short term picture for the pair favors the upside, as in the 1 hour chart, technical indicators have resume their advances within positive territory after correcting the extreme overbought conditions reached earlier in the day. In the same chart,  The 20 SMA heads sharply higher after crossing above the 100 and 200 SMAs, also supporting an upward extension. In the 4 hours chart, the price is well above its 20 and 100 SMAs, while the technical indicators have lost upward strength but consolidate near overbought levels, limiting chances of a downward move.

Support levels: 1.1080 1.1050 1.1010

Resistance levels: 1.1120 1.1160 1.1200

GBP/USD Current price: 1.3152

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The GBP/USD pair retreated from a daily high of 1.3247, settling below the 1.3200 mark ahead of the US opening. Despite the FED and poor US data, the pair trades in the red daily basis, on Pound' self weakness, after the Brexit. Spikes above the 1.3200 level are clearly seen as selling opportunities, although a bearish breakout beyond the 1.3000 figure seems unlikely. Short term, the 1 hour chart presents a strong bearish tone, as the price is well below its 20 SMA, while the technical indicators head sharply lower, well below their mid-lines. In the 4 hours chart, however, the neutral stance persists, with the 20 SMA now horizontal at 1.3135, the immediate support.

Support levels: 1.3135 1.3090 1.3050  

Resistance levels: 1.3190 1.3235 1.3270

USD/JPY Current price: 104.86

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Down to pre-BOJ's stimulus news. Dollar's weakness has helped the Japanese yen recovering the ground lost earlier this week, with the USD/JPY pair now trading around 104.85, below pre-BOJ's stimulus news level. The Bank of Japan will announce its latest economic policy decision during the upcoming Asian session, right before the release of the latest inflation numbers, promising a quite interest price action for early Friday. In the meantime, the pair recovers from a daily low of 104.47 ahead of Wall Street's opening, but the 1 hour chart presents a limited upward potential, as the price is currently developing below its 100 and 200 SMAs, with the shortest providing a strong dynamic resistance around 105.40. In the same chart, the technical indicators head higher within negative territory, still far below their mid-lines, not enough to confirm further gains. In the 4 hours chart, the price has once again bounced from a bullish 100 SMA, the Momentum indicator heads higher above the 100 level, but the RSI remains around 41, with limited upward strength, and in line with further consolidation ahead.

Support levels: 104.60 104.20 103.70

Resistance levels: 105.05 105.40 105.80