US stocks rose sharply on Monday, giving a breath to European currencies that remain under pressure anyway. US investors show no concerns over the $85 billion in across-the-board government spending cuts and pushed indexes back towards recent multi-year highs: Dollar demand diminished, yet barely prevented EUR from falling: the EUR/USD stands barely 10 pips away from past Asian opening, hit by a strong slide in an EU confidence index, that sent EUR/USD to test a daily low of 1.2981 early Europe. US session and a positive New York ISM number prevented the pair from falling, yet were not enough to trigger a risk appetite rally in the pair.
For the short term, the hourly chart continues to present a quite neutral stance, as indicators hover around their midlines and price around a flat 20 SMA. The 1.3040/50 area comes as immediate resistance, and if above, the pair may advance towards 1.3080 before finding buyers. However, bigger time frames maintain the overall bearish trend, and the downside continues to be favored, with a break below 1.2980 opening doors for a 100 pips slide today.
Support levels: 1.2980 1.2940 1.2900
Resistance levels: 1.3050 1.3080 1.3220
View Live Chart for the EUR/JPY (select the currency)
The EUR/JPY remains quiet in range, trading in between Fibonacci levels, limited to the upside by 122.00 area, 50% retracement of its latest bearish leg, and finding buyers around 121.20, 38.2% of the same rally. Technical readings in the hourly chart are flat, with price in between 100 and 200 SMA’s, which distance continues to shrink, reflecting the lack of direction of the pair. In the 4 hours chart the picture is the same, with no much clues on direction for the upcoming hours: price needs to clearly break mentioned Fibonacci levels, to establish a clearer intraday trend.
Support levels: 121.20 120.90 120.40
Resistance levels: 122.00 122.30 122.80
View Live Chart for the GBP/USD (select the currency)
The GBP/USD advanced slowly but steadily since US opening, reaching a daily high of 1.5117. The pair found buyers around 1.5000, level tested after quite disappointing UK construction PMI, and regained the 1.5070 area, now immediate short term support. In the hourly chart, technical readings continue gaining upside momentum, although the 4 hours chart shows indicators barely correcting oversold readings and 20 SMA capping the upside at current levels. Steady gains above 1.5120 price zone, should anticipate an upside continuation in the pair, although with market sensitive to risk lately, the comeback could be nasty, on any kind of disappointing news. 1.5040 area is now the level to watch to the downside, as once below, odds of a break below 1.5000 increase.
Support levels: 1.5070 1.5045 1.5010
Resistance levels: 1.5115 1.5160 1.5200
View Live Chart for the USD/JPY (select the currency)
The USD/JPY holds to its latest range, although still unable to extend beyond the 93.80 area that contains the upside since last Friday. Trading in range, the market seems to be waiting on US employment data next Friday, before deciding whether to resume the bullish trend, or began to profit from last months’ ride. Anyway, and for the short term, technical indicators in the hourly chart remain in neutral territory, yet 100 SMA slowly turns north below current price, suggesting buying interest is still firmly around. In the 4 hours chart price finds support around 100 SMA while momentum heads slowly higher in positive territory, supporting a short term bullish continuation for current Asian session.
Support levels: 93.20 93.70 92.40
Resistance levels: 93.80 94.10 94.50
View Live Chart for the AUD/USD (select the currency)
Australian dollar surges against the greenback, nearing the 1.0200 mark ahead of RBA economic policy meeting. The bank is largely expected to maintain rates unchanged, so should bring not much action unless they decide to make a surprise move. Anyway, the hourly chart shows indicators losing momentum near overbought levels, anticipating a probable reversal: 1.0220 area will be key, as if above, the bullish momentum will likely extend, looking then for 1.0270. Failure at mentioned 1.0220 on contrary, may see the pair resuming the downside. Chances however remain to the upside as per stocks strong upward tone.
Support levels: 1.0180 1.0150 1.0110
Resistance levels: 1.0220 1.0270 1.0300
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