EUR/USD: higher in range, still capped by 1.1400

EUR/USD Current price: 1.1379

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The EUR/USD pair advanced partially this Tuesday, but failed to rallied beyond the 1.1400 level, weighed by worse-than-expected local macroeconomic data and a market that tossed and turned between hope and despair.  The EUR was on demand early in the data, as poor Chinese trade balance data, kept stocks under pressure and lifted the common currency up to 1.1410 against its American rival. But the beginning of the European session, German was again in the eye of the storm, with its September inflation numbers, unchanged from a year before, recording 0.0%. Monthly basis, the CPI fell 0.2%. The ZEW economic survey released afterwards showed that Economic sentiment has further declines in the country during October, down to 1.9 from previous 12.1, whilst the assessment of the current situation resulted at 55.2 from previous 67.5. The EU economic sentiment, according to the same survey, shrank to 30.1 matching expectations,  and sending the EUR/USD pair down to a session low of 1.1364.

The US session saw local stocks firming up after the opening, helping the American dollar to recover some ground, but the indexes later capitulated and so did the greenback. Technically, the short term picture for the pair is neutral-to-bullish, given that the 1 hour chart shows that the price is a few pips above its 20 SMA, whilst the technical indicators lack clear directional strength above their mid-lines. In the 4 hours chart, however, the upside remains favored, as the 20 SMA heads strongly higher around 1.1350, whilst the Momentum indicator is aiming to bounce from its mid-line and the RSI indicator consolidates near overbought levels.

Support levels: 1.1340 1.1290 1.1245

Resistance levels: 1.1400 1.1430 1.1460

EUR/JPY Current price: 136.32

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The EUR/JPY pair aims to end the day flat a few pips above the 136.00 level, having been rage bound ever since the day started. The Japanese yen strengthened some during the first half of the day, following a sharp decline in Asian stocks, but there was no follow through during the American afternoon, with the JPY giving back its tepid gains. Technically, the 1 hour chart shows that the price holds well above a bullish 100 SMA, currently around 135.90 and the immediate support, whilst the technical indicators have turned flat above their mid-lines, with no clear directional strength. In the 4 hours chart, the price remains well above its moving averages, although the Momentum indicator holds below its 100 SMA while the RSI consolidates around 59, with no clear directional clues for the upcoming hours.

Support levels: 135.90 135.60 135.20

Resistance levels: 136.50 136.95 137.30

GBP/USD Current price: 1.5257

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The Pound dive over 180 pips after topping at 1.5387 against its American rival, as the UK inflation unexpectedly dropped below zero. The release of September CPI data showed that inflation fell by 0.1% compared to a year before, being this the second time inflation goes negative in the last 55 years. Producer Price Indexes also fell in September by 1.8% yearly basis, whilst the UK House Price Index for August surged by 5.2%. The GBP/USD pair traded as low as 1.5199 a fresh 5-day low before bouncing some, so far unable to regain the 1.5260 level, a strong static resistance. Short term, the 1 hour chart shows that the technical indicators have bounced strongly from extreme oversold levels, but lost upward strength below their mid-lines, maintaining the risk towards the downside. In the same chart, the 20 SMA heads strongly lower a few pips above the mentioned resistance level. In the 4 hours chart, the technical indicator have also turned north from near oversold levels, but remain well below their mid-lines, whilst the 20 SMA is gaining bearish slope far above the current level. Overall, the downward risk prevails, particularly on renewed selling interest below 1.5230 the 23.6% retracement of the latest weekly decline.

Support levels:  1.5230 1.5190 1.5150

Resistance levels: 1.5260 1.5300 1.5335

USD/JPY Current price: 119.83

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The USD/JPY pair continues going nowhere far, ending the day 20 pips lower after trading as low as 119.54 during the day. The Japanese yen was favored by plummeting stocks in Asia, as the Chinese Trade Balance for September, showed that imports decreased by 17,7% fueling concerns over the global economic slowdown. The pair maintains a limited negative tone, considering that it extended further lower for a second day in-a-row, but the range prevailed for one more day. Technically, the 1 hour chart shows that the price is well below its 100 and 200 SMAs, whilst the technical indicators corrected the oversold readings reached earlier in the day and are now flat below their mid-lines. In the 4 hours chart, the price is now below its 100 and 200 SMAs that continue to lack directional strength, whilst the technical indicators present strong bearish slopes below their mid-lines. The key support for the upcoming hours comes at 119.35, the 38.2% retracement of the pair’s latest weekly decline, and a break below it could lead to a continued decline towards the 118.55 level, the base of these last two months’ range.

Support levels: 119.35 118.90 118.55

Resistance levels: 120.05 120.35 120.70

AUD/USD Current price: 0.7267

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The Aussie took a hit from Chinese data, ending the day sharply lower against the greenback around 0.7270. Additionally, the pair has corrected the extreme overbought readings achieved after a steady 10-days’ advance, and further declines will now depend on markets’ mood during the upcoming Asian session, when China will release its September inflation figures. The pair fell down to 0.7253 before bouncing some, but was unable  to recover, despite gold prices re-surged during the American session. The short term picture favors another leg lower, as the price is below a strongly bearish 20 SMA, whilst the Momentum indicator heads south below its 100 level, and the RSI indicator consolidates in oversold territory. In the 4 hours chart, a bearish continuation is also likely, as the technical indicators head strongly lower below their mid-lines, whilst the price is well below a still bullish 20 SMA. Only a steady recovery beyond 0.7310, the immediate resistance, can help the pair in recovering its bullish strength and send it back towards the 0.7400 price zone.

Support levels: 0.7250 0.7220 0.7175

Resistance levels: 0.7310 0.7350 0.7390

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