EUR/USD: calm before the storm

EUR/USD Current price: 1.1789

View Live Chart for the EUR/USD

The EUR/USD pair has extended its decline to a fresh 9 ½ years low, reaching 1.1753 before bouncing as investors take some profits out of the table ahead of key employment figures in the US next Friday. Dollar rally extended once again on the back of weak European data as producers’ price index remained in negative territory, and consumer confidence resulted down to -12. A recovery in oil prices and sustained gains in stocks across the world, showing risk aversion eased somehow, also supported the greenback. In the US, weekly unemployment claims rose by 4K in the week ending on Dec 26, triggering the dollar corrective movement that prevailed for most of the US session.

The pair remains pretty much subdued, as its latest intraday recovery stalled around the 1.1820 resistance area, and the 1 hour chart shows that the price struggles around a bearish 20 SMA, whilst indicators corrected short term oversold readings, but lost upward momentum below their midlines before turning back lower. In the 4 hours chart 20 SMA maintains its bearish slope offering resistance now at 1.1865, whilst indicators remain near oversold levels, far from suggesting further gains at the time being. The pair will likely remain range bound during Asian hours ahead of US NFP data. If this last overcomes expectations, expect the dollar to resume its advance.

Support levels: 1.1745 1.1710 1.1680

Resistance levels: 1.1820 1.1865 1.1900

EUR/JPY Current price: 141.10

View Live Chart for the EUR/JPY
The EUR/JPY cross trades little changed on the day, still restricted to a tight range around the 141.00 level, amid even weakness of both EUR and JPY against their American rival. The short term technical picture however continues to favor the downside, as the 1 hour chart shows that indicators head lower below their midlines, whilst 100 and 200 SMAs present strong bearish slopes well above the current price. In the 4 hours chart RSI has corrected extreme oversold readings now around 35, while momentum aims higher, approaching the 100 level. But an early rally was rejected around 141.80 static resistance, and it will take some follow through above the 142.00 to ease the bearish pressure in the pair.

Support levels: 140.75 140.30 139.75

Resistance levels:  141.30 141.80 142.40

GBP/USD Current price: 1.5102

View Live Chart for the GBP/USD
The GBP/USD pair fell to a fresh 18-month low of 1.5033, but erased all of its intraday losses by the end of the day, closing it where it started, just above the 1.5100 level. The UK released its Halifax House Price Index earlier on the day, showing that annual prices’ growth eased further, down to 7.8% in December. Moderating house prices all through this last semester has resulted in less pressure to tighten the economic policy over the Bank of England, and while positive for the economy, turns out to be negative for the Pound as a speculative investment for traders. The BOE has had its monthly economic policy meeting also this Thursday, but as usual, it has been a non-event.

Technically, the pair has set a lower low and a lower high daily basis something that maintains the dominant bearish trend intact. Short term, the 1 hour chart shows that the price retraces from a session high of 1.5117 towards a bearish 20 SMA, whilst indicators turned lower towards their midlines. In the 4 hours chart indicators had barely corrected oversold readings before losing their upward strength, while 20 SMA remains above current price, currently around 1.5150. As long as below this last, the risk remains to the downside, eyeing a test of the 1.50 level still.

Support levels: 1.5085 1.5040 1.5000

Resistance levels: 1.5120 1.5160 1.5200

USD/JPY Current price: 119.64

View Live Chart for the USD/JPY
The USD/JPY ended the day with some mild gains, having been as high as 119.96. During the upcoming Asian session, Japan will release its leading economic index for November, which may fail to imprint life to the pair, as it usually remains indifferent to local data ahead of US NFP readings. The pair’s advance was supported by an improve in markets’ sentiment, but worse than expected US weekly unemployment claims triggered a downward correction that anyway stalled around 119.35 now immediate support. Technically, the 1 hour chart shows that the price advances above its 100 SMA but below 200 SMA, this last offering short term resistance now around 119.80 while indicators turned higher around their midlines. In the 4 hours chart, technical readings are biased higher well into positive territory, suggesting some further advances ahead.

Support levels:  119.35 118.80 118.30

Resistance levels: 119.80 120.30 120.80

AUD/USD Current price: 0.8105

View Live Chart of the AUD/USD
The Australian dollar advanced some against its American rival, with the AUD/USD pair reaching an intraday high of 0.8130. However, the pair has remained confined to a tight range around the 0.8100 level, as it has occurred for most of this week. During the upcoming hours, Australia will publish its Retail Sales for November, although Chinese inflation figures will probably be the main market driver during Asian hours, particularly affecting antipodean currencies. Expected above previous readings in its monthly and yearly readings, if the final numbers result below forecasts, the Australian dollar will likely ease back towards 0.8032, its recent multiyear low. In the short term and according to technical readings, the pair presents a mild negative tone, as per the 1 hour chart showing price pressuring a bullish 20 SMA and indicators heading lower towards their midlines, while in the 4 hours chart, the outlook is neutral, as per 20 SMA flat a few pips below current price and indicators hovering directionless around their midlines. The immediate support comes at 0.8090 and it will take a break below to confirm further intraday declines.

Support levels: 0.8090 0.8035 0.7990

Resistance levels: 0.8125 0.8150 0.8185