EUR/USD Current price: 1.1259
The American dollar took a dive early in the US session, as commodities extended their latest advances, with gold approaching $1,150 a troy ounce and WTI surging above $47.0 a barrel. US indexes also opened broadly higher, but gave up most of its intraday gains ahead of the close. The EUR/USD pair traded in quite a limited range during the first half of the day, hovering around the 1.1200 and lacking directional strength, as no clues came from European stocks, which traded range bound during the European morning. The macroeconomic calendar was light, with Germany factory orders, down 1.8% in August compared to July, and the US trade balance deficit that widened to $48.3B in the same month, the largest expansion in US deficit in five months. The news boosted local share markets as sagging exports should put additional pressure on a FED’s possible rate hike.
The EUR/USD pair surged to a daily high of 1.1274, trading within Monday’s range and still confined in a daily triangle. Short term, the upward momentum is fading in the 1 hour chart, as despite the price is well above its moving averages, the technical indicators are beginning to show signs of exhaustion near overbought territory. In the 4 hours chart, the 20 SMA is now aiming higher around 1.1200, whilst the Momentum indicator turned south and is crossing now below its 100 level, whilst the RSI indicator stands flat around 58, all of which limits chances of additional gains, during the upcoming hours. Additionally, the price is getting too close to the vortex of the figure, and it will be invalidate if it’s not broken during the next couple of days. For this Wednesday, the roof of the figure is set at 1.1285, whilst the base stands now at 1.1160.
Support levels: 1.1245 1.1200 1.1160
Resistance levels: 1.1285 1.1335 1.1370
EUR/JPY Current price: 135.57
The EUR/JPY pair advanced over 100 pips this Tuesday, establishing fresh daily highs ahead of the US close in the 135.50/60 price zone, on broad EUR demand and a neutral JPY. Ahead of the Bank of Japan economic policy meeting, later in the Asian session, the hour chart shows that the pair surged sharply after bottoming around its 100 SMA, and that the technical indicators head higher in overbought levels. In the 4 hours chart, the price is above its 100 and 200 SMAs for the first time since mid September, while the technical indicators are losing their upward strength, but hold well above their mid-lines. Additional gains beyond 135.70, this month high, should lead to a continued advance towards the 137.00 price zone.
Support levels: 135.10 134.60 134.20
Resistance levels: 135.70 136.20 136.70
GBP/USD Current price: 1.5230
The British Pound advanced towards a critical resistance against its American rival, with the pair trading a handful of pips below the 23.6% retracement of its latest bearish run around 1.5240 by the US close. In the UK, the Halifax house prices indexes showed that during the third quarter of 2015, prices surged by 2.0% compared to the previous quarter, and 8.6% compared to a year before. The numbers were below market’s expectations, but continue to suggest a bubble is surging in the housing sector, as the increasing demand of new houses is the result of interest rates holding near zero in the UK. Fears are that, once the BOE decides to tighten its economic policy, the housing market will collapse, leading to a new crisis. In the meantime, the short term technical picture is bullish, as the 1 hour chart shows that the 20 SMA heads strongly higher below the current level, whilst the technical indicators are aiming higher after consolidating in overbought territory. In the 4 hours chart the price is also above a mild bullish 20 SMA, but the technical indicators lack upward momentum, hovering however, in positive territory. The pair needs to accelerate above the 1.5245 level to be able to extend its advance, towards the 1.5320 price zone, the 38.2% retracement of the same decline.
Support levels: 1.5130 1.5100 1.5060
Resistance levels: 1.5245 1.5270 1.5320
USD/JPY Current price: 120.29
The USD/JPY pair traded uneventfully around the 120.35 Fibonacci level for most of this Tuesday, as investors can´t find a trigger strong enough to take the pair out of its latest range. The BOJ will release the result of its latest economic policy meeting during the upcoming hours, but market’s expectations are that the Central Bank is likely to maintain the current pace of monetary easing unchanged, mostly because its due to revise its economic and inflation forecasts and have another economic policy meeting by the end of this month. In the meantime, the pair presents a mild bearish tone in the short term, as the 1 hour chart shows that the 100 and 200 SMAs converge around 120.05, whilst the technical indicators head lower below their mid-lines. In the 4 hours chart, the price is a few pips above its 100 and 200 SMAs, with the largest presenting a sharp bearish slope, whilst the technical indicators head higher after bouncing from their mid-lines, supporting additional advances, although only above 120.70 the pair will be able to extend its gains this Wednesday.
Support levels: 120.05 119.60 119.35
Resistance levels: 120.70 121.00 121.35
AUD/USD Current price: 0.7153
The AUD/USD pair trades at its highest in 2 weeks, boosted by a less dovish than-expected RBA statement at the beginning of the day, and a continued recovery in commodity prices. The Central Bank Governor, Glenn Stevens, showed little concern over the economic slowdown in the region, and even cited improvement in the labor market after leaving rates unchanged at 2.0%. The pair holds near its highs early Asia and the 1 hour chart shows that the Momentum indicator has resumed its advance well above its 100 level after correcting overbought readings, whilst the RSI indicator holds around 70, and the 20 SMA heads sharply higher around 0.7120. In the 4 hours chart the technical indicators have lost upward their strength near overbought levels, but the price has broken above its 200 EMA for the first time since mid September, supporting additional gains in the mid-term, as long as the level holds.
Support levels: 0.7115 0.7170 0.7130
Resistance levels: 0.7180 0.7230 0.7280