Technical Analysis : EUR/USD: sleeps as market moves on

EUR/USD Current price: 1.2421


The EUR/USD didn’t acknowledge market came back to full activity mode, confined to an even tighter range than earlier on the week, for most of the day. The greenback has been under pressure for most of the European session and early US, as stocks markets were in red. However, US indexes getting into positive territory before the closing bell, gave the dollar a boost with the American currency down only against its commodity rivals, the daily winners. From a fundamental point of view, data in Europe was mixed with German wholesales index down but EZ industrial production up by 0.6% in September.

The pair was again rejected from the 1.2500 price zone, closing the day at its lows, yet above the 1.2400 figure; technically, the 1 hour chart shows moving averages all aligned in a 40 pips range which clearly reflects the lack of definitions in the pair. Indicators in this time frame gain bearish strength below their midlines, whist indicators in the 4 hours chart also gain bearish tone as the day comes to an end. Nevertheless, it will take a break below 1.2400 to confirm further declines, with sellers now expected to reappear on approaches to the 1.2500 price zone.

Support levels: 1.2400 1.2370 1.2330

Resistance levels: 1.2440 1.2490 1.2520

EUR/JPY Current price: 143.67

The yen gained some track early European morning on news PM Shinzo Abe denied the possibility of a delay in the tax hike or to dissolve the Lower House “at all”, according to his words. Yen momentum against most rivals was however limited, being slowly reversed ahead of Asian opening on hopes local share markets will continue to run. Technically the EUR/JPY 1 hour chart shows price in a quite tight range for most of the last few hours, with 100 and 200 SMAs a few pips below current price and lacking directional strength, as indicators remain below their midlines. In the 4 hours chart however indicators not only held above their midlines, but are now turning back higher as price recovers from a daily low of 143.34. At this point is difficult to be on the selling side of yen crosses, as pullbacks are usually shallow and short lived. Buying the dips continues to be the favored trading plan then, when it comes to yen pairs.

Support levels: 143.45 143.00 142.55

Resistance levels: 144.40 144.90 145.30

GBP/USD Current price: 1.5781

Pound had it tough on Wednesday, finally capitulating to fresh year lows on the back of late dollar strength. Earlier on the day, UK employment figures resulted weaker than expected, yet a small tick in wages saved the pair from nose diving; and hour later however, BoE’s Quarterly Inflation Report surprised to the downside, with a forecast of inflation below 1% for the upcoming 6 months, and seen returning to normal in three years: rate hikes as for investors, has been took out of the picture. Technically, the pair stands a few pips below previous year low, pressuring the key midterm strong static support around 1.5770, with the 1 hour chart showing indicators heading strongly south near oversold territory and 20 SMA gaining bearish slope well above current price. In the 4 hours chart price accelerated through a still flat 20 SMA but indicators present a clear bearish momentum, suggesting some downward continuation in the short term. Clear break below mentioned level however, should open doors for some further slides in term, eyeing then the 1.5500 figure as next probable target.

Support levels: 1.5770 1.5730 1.5690

Resistance levels: 1.5830 1.5855 1.5890

USD/JPY Current price: 115.66

The USD/JPY recovered from a daily low of 114.88 posted early US opening extended above 115.50 level, a clear reflection of where interests are in the pair these days. The 1 hour chart shows 100 SMA acted as intraday support, with a short spike below it but no candle opening in there, whilst indicators aim slightly higher above their midlines, as per price recovering within recent ranges. 100 and 200 SMAs are now more aligned with price action, with 200 one at 114.40, being a small line in the sand for the dominant trend, as risk of a strong slide will be dependent on the ability of price to break below it. In the 4 hours chart indicators slowly aim higher always in negative territory, showing no actual momentum at the time being. Some further gains should be now expected, eyeing and advance above 116.00 in the upcoming hours moreover if local share markets have a good day.

Support levels: 115.50 114.90 114.40

Resistance levels: 115.90 116.25 116.60

AUD/USD Current price: 0.8710

Australian dollar surged to a 5-day high against the greenback of 0.8744, holding above the 0.8700 figure as the day fades. Daily chart shows mentioned high converges with 20 DMA, pulling back to it after the dip to 0.8552 yet still below and with a bearish slope, giving little support by now to a steadier recovery. Short term, the 1 hour chart shows price retracing towards a still bullish 20 SMA while indicators turned lower in positive territory. In the 4 hours chart however, 20 SMA heads strongly north below current price as momentum picks up after approaching 100, limiting slides in the short term. Price needs to extend beyond 0.8770 to extend its gains in a way that would suggest further advances in the near future, whilst a decline below 0.8660 should see the pair back in selling mode.

Support levels: 0.8690 0.8660 0.8620

Resistance levels: 0.8730 0.8770 0.8815