EUR/USD: dollar stronger on gold decline

EUR/USD Current price: 1.2434


he main highlight of the weekend has been the Swiss referendum vote: roughly 78% voted against expanding central bank gold reserves, giving a breath to SNB current economic policy, and weighting on gold and therefore giving the greenback some support. For the days ahead, the calendar will be uploaded with fundamental data, with the main risk events for the EUR/USD pair being ECB meeting on Thursday and US employment figures on Friday that will decide if November’s consolidation in the pair would extend into 2015, or not. When it comes to the ECB, the Central Bank will publish updated macro-economic projections that are expected to show a marked decline in both growth and inflation in line with current situation around Europe, while the so long promised QE will likely be delayed once again

In the meantime, the EUR/USD pair opens the week pretty much where it closed last week, with the 1 hour chart showing price below 100 and 200 SMAs and around a flat 20 SMA while indicators stand directionless around their midlines. In the 4 hours chart a mild bearish tone prevails as price pressures 1.2440 and indicators head lower below their midlines. The pair has been trading for these last few days between 1.2400 and 1.2520, meaning a clear break of any of those extremes is required to confirm some directional short term move for this Monday.

Support levels: 1.2400 1.2360 1.2320

Resistance levels: 1.2520 1.2555 1.2600

GBP/USD Current price: 1.5626

View Live Chart for the GBP/USD
Cable maintains a heavy tone, after the failure break higher last week: on Thursday the pair finally managed to overcame 1.5740 area extending up to 1.5825, only to close Friday erasing all of its weekly gains down to 1.5648. The BOE is also expected to meet this week, but the Central Bank is expected to maintain its economic policy unchanged, becoming as lately a non-event. Technically, the pair has established a floor mid November around 1.5585 that can be challenged over the upcoming days if sellers surge on spikes up to mentioned 1.5740. In the 1 hour chart, indicators turned lower well below their midlines after correcting oversold readings, while 20 SMA heads strongly lower well above current price. In the 4 hours chart indicators present a clear bearish momentum, but 20 SMA stands directionless around 1.5710. Friday’s low at 1.5613 stands as immediate support and a break below should lead to a quick test of mentioned floor, while if this last gives up, 1.5500 comes as next probable bearish target.

Support levels: 1.5615 1.5585 1.5540

Resistance levels: 1.5660 1.5700 1.5740

USD/JPY Current price: 118.90

View Live Chart for the USD/JPY
The USD/JPY pair finally found buyers around 117.22, last Thursday low, regaining the upside and trading back a handful pips below this year high of 118.96. The 1 hour chart shows price has advanced fast above both 100 and 200 SMAs, now aligned in the 117.80/90 price zone, with the longest approaching the shorter from below, which means an upward continuation is not yet confirmed, while indicators lose upward potential but hold in overbought territory. In the 4 hours chart moving average develop far from each other with 100 one around 116.80, momentum heads higher above 100 and RSI retraces from 70: bulls need to break above the 119.00 figure to regain their dominance on the pair as failure to overcome the level will likely trigger some profit taking and push the pair back lower, down to 117.00. If this last gives up without convincing buying, the pair will be poised to a stronger slide over the month, with the 115.00 figure then at sight.

Support levels:  118.40 117.95 117.30

Resistance levels: 118.90 119.25 119.60

AUD/USD Current price: 0.8460

View Live Chart of the AUD/USD
The AUD/USD pair gaps lower at the opening, reaching fresh 4-year lows at 0.8467. Under pressure since early interbank trading due to rumors the Australian government is lowering its presumed iron ore price to $60/ton, the pair is also being weighted by RBNZ’s Wheeler comments, stating the bank can do little about overvalued NZD.  The dominant bearish trend is here to start in the AUD, with the AUD/USD 1 hour chart showing price extending below a bearish 20 SMA and indicators accelerating south below their midlines. In the 4 hours chart 20 SMA capped the upside on Friday and maintains its bearish slope now offering dynamic resistance around 0.8533, while indicators resumed the downside below their midlines. The gap can be filled if the pair advances up to 0.8510, yet if it does but the level holds, fresh lows below mentioned one are to be expected for the day.

Support levels: 0.8440 0.8400 0.8360

Resistance levels: 0.8505 0.8535 0.8580