EUR/USD: retreating from critical resistance

EUR/USD Current price: 1.0793

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The EUR/USD pair trades around the 1.0800 level for the first time since early February, with the common currency getting a boost from the outcome of the first French presidential debate. Emmanuel Macron stood victorious, although Marine Le Pen still leads among intention polls. Dollar's broad weakness ever since the latest Fed's meeting, helped the pair to advance up to 1.0811 so far today, not far from a major Fibonacci resistance, the 50% retracement of the post-US election decline at 1.0820. There is little to take care of in the US, except for a couple of Fed speakers and that will hardly be enough to revert dollar's negative momentum.

From a technical point of view, the 1 hour chart shows that technical indicators are losing upward strength near overbought readings, indicating some short-term upward exhaustion, but given that the price remains well above a bullish 20 SMA, the risk of a downward move remains limited. In the 4 hours chart, the RSI indicator is pulling back modestly after testing 70, while the Momentum indicator maintains its bullish slope within positive territory, and the price develops well above a bullish 20 SMA, all of which favors additional gains, moreover o a break above the mentioned 1.0820 level.

Support levels: 1.0770 1.0735 1.0700

Resistance levels: 1.0820 1.0860 1.0900         

GBP/USD Current price: 1.2454

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The GBP/USD pair trades at its highest in over a month, as higher-than-expected inflation data for February fueled speculation that the Bank of England will be forced to raise rates sooner than expected. Yearly inflation surged to 2.3% in February from previous 1.8%, above 2% for the first time in over three years. The core reading came in at 2.0% from previous 1.6%. The Retail Price Index also advanced beyond expected, up by 3.2% in the same month, far above previous 2.6%. The pair topped at 1.2473, consolidating a handful of pips below the level ahead of Wall Street's opening. From a technical point of view, the 1 hour chart shows that the price is well above a bullish 20 SMA, whilst technical indicators have lost upward strength, but hold within overbought territory, reflecting the latest correction rather than suggesting an upcoming downward move. In the 4 hours chart the technical picture is quite alike, with technical indicators barely retreating within positive territory, but the price holding well above a bullish 20 SMA. The latest rally has sent price above 1.2425, the 38.2% retracement of the January rally, now the immediate support. The bullish tone will persists, as long as this last level holds.

Support levels: 1.2425 1.2385 1.2345

Resistance levels: 1.2470 1.2510 1.2550

USD/JPY Current price: 112.57

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Downward pressure persists. The USD/JPY pair continues consolidating below the 113.00, level, having extended its weekly decline down to 112.25 early Asia, on broad dollar's weakness. During the Asian session, BOJ's board member Iwata commented on rates differentials, saying the Japanese yen could weaken against the greenback on interest rate differentials, but that those are not the only factor determining FX levels. The short term picture for the pair is neutral-to-bearish according to the 1 hour chart, as technical indicators are flat around their mid-lines, but the 100 SMA has accelerated its slide well above the current level, offering a strong dynamic resistance in the case of a recovery at 113.10. In the 4 hours chart, the price remains far below horizontal moving averages, whilst technical indicators have turned higher within range, but still below their mid-lines, also favoring a new leg lower. At this point, a break below 112.00 is required to confirm a steeper decline, which will likely extend pass 111.60, in where the pair bottomed multiple times during the last two-months.

Support levels: 112.45 112.00 111.65

Resistance levels: 113.10 113.50 114.00 

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