EUR/USD: still at risk of a bearish run

EUR/USD Current Price: 1.1221

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The week started with thin trading volumes, and with the greenback paring the upward momentum triggered by FOMC's Minutes. The common currency traded modestly lower, briefly falling below the 1.1200 level against its American rival, and holding near the figure as the day ends. Data coming from Europe was mixed, as consumer confidence in the region surged to -7.0 for April from -9.3 the previous month, the strongest figure since January 2016, but with the region growth stalling, as the preliminary Markit PMIs for the EU missed expectations. The manufacturing sector PMI shrank from 51.7 to 51.5, while the services sector grew by 53.1, matching April figure, but below the 53.3 expected. In the US, things were no better, as the  seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index came in  at 50.5, down from 50.8 in April.

The EUR/USD pair maintains the bearish bias, despite the lack of follow through, still contained in the short term by selling interest in the 1.1240/50 region, but more important, trading below 1.1280, the resistance to overcome to confirm additional gains in the nearest term. The 4 hours chart shows that the pair continues consolidating near the two-month low set last Friday at 1.1179. In the 4 hours chart, the price is hovering around a sharply bearish 20 SMA, whilst the Momentum indicator aims higher around its mid-line, and the RSI bounces from oversold readings, indicating limited selling interest around the pair. A break below 1.1160, a strong static support is required to confirm a downward continuation for this Tuesday.

Support levels: 1.1195 1.1160 1.1120 

Resistance levels: 1.1245 1.1280 1.1330

EUR/JPY Current price: 122.58

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The EUR/JPY pair fell to its lowest since May 9th, as the Japanese yen outperformed its major rivals on the back of US Treasury Secretary warning against Japan's yen intervention to weaken the yen in the weekend's G7 meeting. Falling stocks during the Asian and European session fueled the advance of the JPY. Now trading a few pips above the daily low of 122.38 the EUR/JPY pair 1 hour chart shows that downward pressure persists, as the technical indicators have resumed their declines after a tepid correction of oversold readings, whilst the price is now far below its 100 and 200 SMAs, in the 123.20/40 region. In the 4 hours chart, the price has broken below its moving averages that anyway remain flat, due to the lack of directional strength seen last week, whilst the technical indicators hold within negative territory, suggesting the upside will likely remain limited.  

Support levels: 122.25  121.80 12140

Resistance levels: 122.70 123.10 123.60

GBP/USD Current price: 1.4483

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The GBP/USD pair closed the day slightly lower in the 1.4480 region, but saw some nice intraday spikes, with the Pound benefited from speculative interest paring dollar's demand. The UK calendar will remain light until next Thursday, when the kingdom will release  its preliminary Q1 GDP figures. In the meantime, Brexit polls and fears will keep on leading the way. The long-term technical picture has turned neutral, with the downward risk probably increasing as the referendum looms, but chances of a break below the 1.4000 figure are still out of the picture. Shorter term, a bearish tone prevails as in the 1 hour chart, the price has been unable to recover above a bearish 20 SMA, ever since breaking below it in the European morning, while the technical indicators turned south within bearish territory. In the 4 hours chart, the 20 SMA turns lower around the daily high of 1.4548,  offering a strong dynamic resistance in the case of further advances, whilst the technical indicators are recovering from near oversold readings, but remain well below their mid-lines. 

Support levels: 1.4460 1.4425 1.4380 

Resistance levels: 1.4510 1.4545 1.4590

USD/JPY Current price: 109.14

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The USD/JPY pair plummeted to 119.10 this Monday, with the Japanese yen fueled by growing tensions between the US and Japan in regards of US and Japan exchange rate policies, as discussed during the weekend G7 meeting. The poor performance of worldwide stocks, also spurred demand for the safe-haven currency, which seems now poised to resume its bearish trend. The pair retreated from a major resistance level, the 110.60 price zone tested last Friday, which adds to the bearish case. In the short term, the 1 hour chart shows that the price is accelerating its decline after breaking below the 200 SMA, having fallen below the 100 SMA early Europe. In the same chart, the technical indicators present sharp bearish slopes and are currently entering oversold territory, which means that if the price does not quickly recover above the 109.50 level, the bearish run will likely extend. In the 4 hours chart, the technical indicators also head south within negative territory, with the RSI accelerating lower around 37, anticipating the continued decline on a break below 108.70, the 50% retracement of the latest daily decline. 

Support levels: 108.70 108.30 107.90

Resistance levels: 109.50 109.80 110.10 

AUD/USD Current price: 0.7222

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The AUD/USD pair fell to a daily low of 0.7194 early US session, but worse-than-expected manufacturing data released by the world's largest economy helped it to recover the ground lost, to end the day pretty much flat in the  0.7220 price zone. The macroeconomic calendar will be empty in Australia, although RBA's governor, Glen Stevens, is due to speak at the Trans-Tasman Business Circle briefing, in Sydney during the upcoming Asian session, and investors will be looking for clues on any upcoming rate cut in the antipodean country, to justify further sells. The technical picture favors such declines, although the price remains stuck around a mayor Fibonacci level, the 61.8% retracement of this year's rally at 0.7210. In the 1 hour chart, the price is developing below a horizontal 20 SMA, while the technical indicators hold within negative territory, with tepid bearish slopes, suggesting the upside is quite limited. In the 4 hours chart, the price is now aiming to advance above a bearish 20 SMA, whilst the technical indicators present modest bullish slopes, with the RSI indicator still far below its mid-line and the Momentum indicator around its mid-line. At this point, the price needs to advance above 0.7250, the immediate resistance, to be able to shrug off the negative tone and be able to recover up to 0.7330, the 50% retracement of this year's slump. 

Support levels: 0.7210 0.7170 0.7130

Resistance levels: 0.7250 0.7290 0.7330