EUR/USD: dollar struggles to regain momentum

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0968

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The EUR/USD pair traded within a well-limited range during the first half of this Wednesday, meeting selling interest on attempts to advance beyond the 1.1000 level. Chinese data release overnight failed to motivate investors, with Q3 GDP figures and investment matching market's expectations, Retail Sales ticking modestly higher in September, up to 10.7% from previous 10.6%, while Industrial Production fell to 6.1% from previous 6.3%. During the European morning, the EU released its August construction output, much weaker than in the previous month, declining by 0.8%.

The pair accelerated its decline ahead of the release of US housing data, which came out mixed, as housing starts during September were of 1.047M, below 1.175M expected, although Building Permits rose to 1.225M, beating expectations of 1.165. The EUR/USD pair bounced modestly from a low of 1.0960, but maintains a negative tone, given that in the 1hour chart, technical indicators head lower within negative territory whilst the price remains below a bearish 20 SMA, currently at 1.0983. In the 4 hours chart, the risk is also towards the downside, with technical indicators also heading south below their mid-lines, and the price unable to settle above a bearish 20 SMA.

Support levels: 1.0950 1.0910 1.0860

Resistance levels: 1.1000 1.1035 1.1070

GBP/USD Current price: 1.2293

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The GBP/USD pair traded as high as 1.2332 today, level reached after the release of generally positive UK employment data. According to the official release, the number of people in work rose by 106,000 in the three months to August, well below the latest readings, although the unemployment rate remains steady at 4.9%. Wages came in line with markets' expectations, with a modest uptick in earning excluding bonus to 2.3%. The pair, however, was unable to surpass the strong static resistance level, as selling interest has been surging around 1.2320/30 since last week. The release of US mixed data barely affected the pair that holds around the 1.2300 region. Technically, the 1 hour chart shows that the price is stuck around a flat 20 SMA, while technical indicators lack directional momentum around their mid-lines. In the 4 hours chart, the price holds above a modestly bullish 20 SMA, although technical indicators have lost upward strength and began to ease from near overbought readings, indicating some upside exhaustion, but not enough to confirm an upcoming bearish move.

Support levels: 1.2250 1.2210 1.2170

Resistance levels: 1.2330 1.2370 1.2410

USD/JPY Current price: 103.39

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Breaking lower, watch 102.60. The USD/JPY pair fell to 103.24, its lowest for the week, weighed by the poor performance of Asian and European equities, also after repeatedly failing to run beyond the 104.00 mark. There were no relevant news coming from Japan, and US housing data came in mixed, failing to provide a clear signal for the pair. Investors may turn cautious during the US afternoon, ahead of the third US presidential debate and ECB's economic policy meeting on Thursday. Anyway, the pair has turned technically bearish, given that in the 1 hour chart, it has broken below an ascendant trend line coming from Oct. 10, while trading below its 100 and 200 SMAs. In the same chart, technical indicators head south within negative territory, supporting a downward extension. In the 4 hours chart, technical indicators have lost downward strength but remain well below their mid-lines, whilst the 100 SMA heads higher below the current level, limiting chances of a steeper decline. The key support comes at 102.60, the 100 DMA, as a break below it will confirm a continued slide for the upcoming sessions.

Support levels: 103.00 102.60 102.20

Resistance levels: 103.65 104.10 104.60

AUD/USD Current price: 0.7677

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The AUD/USD pair holds on to its latest gains, having reversed an early decline to 0.7658, but unable to extend beyond the critical 0.7700 level. The Aussie stays afloat due to a strong recovery in base metals' prices, with spot gold rising to its highest in two weeks, now around 1,270.43, although the market is not sure on what to do next with the greenback. The pair is technically bullish, as in the 1 hour chart, the price is holding above a horizontal 20 SMA while technical indicators bounced from their mid-lines, although with limited upward momentum. In the 4 hours chart, the 20 SMA maintains a strong upward slope well below the current level, while technical indicators have lost upward strength, but remain within overbought territory, indicating some further consolidation ahead.

Support levels: 0.7650 0.7600 0.7560

Resistance levels: 0.7690 0.7720 0.7750

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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