Market was shocked on Wednesday after first, China cut its bank reserve ratio by 50 bps and then, 6 major central banks extend swap lines to ease European financial jitters, by cutting dollar swaps by 50bp. Later on the day, a rumor circulated about a big European bank getting close to failure Tuesday night which may have been the main reason of the coordinated movement. Market players jumped to high yields, sending stocks strongly up: DJIA posted its largest daily gain since March 2009. The EUR/USD rose to 1.3533 before getting exhausted, pulling back to find support around current area, previous weekly high and immediate support zone. Hourly chart shows indicators heading back higher amid ruling optimism, with local share markets following its oversea partners and favoring also the upside. In the 4 hours chart, the bullish tone has lost momentum, while price remained capped below a descendant trend line coming from 1.3858 past November 19th daily high. Bias will likely remain bullish despite indicators, as market sentiment continues to lead the way.
Support levels: 1.3440 1.3400 1.3365
Resistance levels: 1.3480 1.3530 1.3570
The GBP/USD soared to 1.5778, strong static resistance zone and 200 EMA in the 4 hours chart, from where the pair retreated most of the American session despite the positive mood. The hourly chart shows price in a consolidative stage just above 1.5670, while indicators start heading up higher, supporting more gain as long as above mentioned support. In the 4 hours chart, indicators are also losing the good shape, yet the downside seems also limited as per a strongly bullish 20 SMA acting as dynamic support.
Support levels: 1.5670 1.5635 1.5590
Resistance levels: 1.5730 1.5770 1.5810
The Japanese yen accelerate higher on dollar selloff across the board, with the USD/JPY reaching 77.32 weekly low. Stocks strength however, favored a recovery in the pair that managed to close the day just above the 77.50 level, 50% Fibonacci retracement of the bullish post intervention rally. Still looking bearish in the hourly chart as per indicators heading lower below their midlines, price needs to break below 77.20, 100 DMA, to gain bearish tone, not seen for the upcoming sessions. The upside will open only after a clear break of the 78.05 level, 38.2% of the same rally.
Support levels: 77.50 77.25 76.90
Resistance levels: 77.70 78.05 78.40
The AUD/USD jumped to 1.0330, 61.8% retracement of the latest daily fall following the coordinated swap cut, spending most of the rest of the journey consolidating nearby. Hourly chart shows RSI flat above 70, while momentum heads back north after a limited bearish corrective movement. In the 4 hours chart, indicators look slightly exhausted to the upside, yet price does not follow them, supporting more gains for Aussie against greenback. Break above mentioned 1.0330 area, should signal a strong bullish continuation rally for the upcoming sessions.
Support levels: 1.0240 1.0200 1.0165
Resistance levels: 1.0330 1.0370 1.0410
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