EUR/USD: heading towards the base of its range

EUR/USD Current price: 1.1179

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The EUR/USD pair advanced up to 1.1288 during the European opening, but gave up over 100 pips afterwards, with no certain catalyst behind the move, but a steady advance in worldwide stocks. Investors continued trading in the light of the latest US NFP report, as the poor result of the country’s inflation figures of September, fueled speculation that the Federal Reserve won’t be able to raise rates this 2015. As for macroeconomic data, figures were soft both in Europe and the US, with the services PMI readings missing expectations. The services´ sector posted a limited growth in the EU according to the Markit survey, down to 53.7 from previous 54. In the US, the final reading came out at 56.9 against previous 59.0.

Technically, and in the short term, the pair has turned bearish, as in the 1 hour chart, the price has returned below its moving averages, whilst the technical indicators maintain their strong bearish slopes well below their mid-lines. In the 4 hours chart, the pair points to close the day below a still flat 20 SMA, whilst the technical indicators turned sharply lower and crossed their mid-lines towards the downside, pointing for a test of the base of its latest range in the 1.1100/20 price zone.

Support levels: 1.1160 1.1120 1.1080

Resistance levels: 1.1200 1.1245 1.1290

EUR/JPY Current price: 134.65

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The EUR/JPY advanced up to 135.71 intraday, boosted by EUR gains and a weak JPY, pressured by the continued advance in stocks. The pair however, retreated alongside with the EUR/USD, erasing all of its intraday gains. Technically, the 1 hour chart shows that the technical indicators head lower below their mid-lines, coming from overbought levels, whilst the 100 and 200 SMAs remain in a tight 20 pips range in the 134.30/50 region, offering an immediate intraday support. In the 4 hours chart, the technical indicators are biased lower, but still above their mid-lines, whilst the price remains below their moving averages. A continued decline through the 134.40 level should lead to a retest of the 133.30 price zone, with the upside still seen limited by selling interest on spikes.

Support levels: 134.00 133.65 133.30

Resistance levels: 134.95 135.40 135.90

GBP/USD Current price: 1.5147

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The British Pound advanced up to 1.5247 against its American rival at the beginning of the European session,  where the pair met selling interest around the 23.6% retracement of its latest daily decline. The initial decline was triggered by the poor UK Markit Services PMI, down to 53.3 in September from previous 55.6. So far, the sector has been leading the local economic recovery, and the negative number, which is the lowest in over two and a half years, fueled concerns over the health of the UK economy. Technically, the 1 hour chart shows that the technical indicators maintain their sharp negative tone, despite being near oversold levels, whilst the 20 SMA has turned lower, now converging with the strong static resistance level at 1.5200. In the 4 hours chart, the price is now below a horizontal 20 SMA, whilst the technical indicators are crossing their mid-lines towards the downside, supporting a continued decline towards the 1.5100 region, which if broken, could see the pair extending its decline down to the 1.5000 level.

Support levels: 1.5130 1.5100 1.5060

Resistance levels:  1.5160 1.5200 1.5235

USD/JPY Current price: 120.46

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The USD/JPY posted a slow, but steady intraday advance, breaking above the 120.35 Fibonacci level  during the American afternoon, helped by the continued gains in the US stocks’ market. Also, supporting the pair are US 10y treasury yields, up to 2.06%, daily basis. The 1 hour chart shows that the price is now above its 100 and 200 SMAs, both still flat around the 120.00 region, whilst the technical indicators remain flat in positive territory. In the 4 hours chart, the price is above its moving averages, whilst the technical indicators head higher above their mid-lines, supporting additional advances as long as the price holds above 120.35, the 50% retracement of the latest weekly decline and the immediate support. Additional gains beyond 120.70 the immediate resistance, should lead to a test of the top of the latest range at 121.35, the 61.8% retracement of the same rally.

Support levels: 120.35 120.00 119.60

Resistance levels: 120.70 121.00 121.35

AUD/USD Current price: 0.7090

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The AUD/USD pair advanced up to 0.7110 at the beginning of this week, finding support in strong commodities’ prices. The pair retreated from the level, down to 0.7055 before recovering back towards its high, amid rising stocks. The short term picture is bullish, as the 1 hour chart shows that the price is well above a bullish 20 SMA, although the technical indicators have lost their bullish strength, still holding above their mid-lines. In the 4 hours chart, the upward potential is also clear, as the 20 SMA heads sharply higher, currently around  0.7050, whilst the Momentum indicator heads sharply higher well above its 100 level and the RSI indicator consolidates around 59. In this last chart, the 200 EMA stands around the mentioned daily high of 0.7110, and a break above it should confirm additional gains, pointing to an approach to the 0.7200 price zone later on in the day.

Support levels: 0.7050 0.7020 0.6980

Resistance levels: 0.7110 0.7140 0.7190

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