The so long expected EU concluded with a new fiscal pact, yet as Irish Minister said over the weekend, that won’t solve the crisis, as the “agreement doesn’t include a new role for the ECB”. The central bank has been created to deal with inflation, not to act as a Federal Reserve and its Presidents’ and their policies, followed that lead. In the meantime, the UK is the only EU country which will not take part in drafting the new rules on fiscal discipline. The EUR/USD starts the week unchanged from past Fridays’ New York close, trading below 1.3400 and with hourly chart showing indicators slightly bullish above their midlines while price holds above 20 SMA. The upside however, remains limited by a daily descendant trend line coming from 1.3548, today around 1.3430. Trading lower in range, bias should remain to the downside as long as below mentioned trend line.
Support levels: 1.3330 1.3285 1.3250
Resistance levels: 1.3390 0 1.3430 1.3470
The GBP/USD has been trading in a 200 pip range since early December in between 1.5560 and the 1.5570 price zone, lacking clear direction as market stress also affects the Pound. Starting the week barely below the 1.5660 strong static resistance area, the hourly chart shows price coming under some selling pressure, aiming to break below 20 SMA while indicators hold above their midlines. In the 4 hours chart the bearish tone persists as the pair remains limited to the upside, by 200 EMA after failing several times over past week to break above it. Bias is also bearish in the weekly opening, yet with the limitation of the base of the range still weighting in trend.
Support levels: 1.5600 1.5560 1.5510
Resistance levels: 1.5660 1.5700 1.5740
Risk sentiment keeps yen strong against major rivals, with the USD/JPY trading in a very limited range yet holding an overall bearish tone as seen in the hourly chart, with price developing below moving averages and indicators holding steady below their midlines. Daily chart shows 100 DMA around 77.05, key support for the pair as a daily close below it should erase chances of another recovery above 78.00.
Support levels: 77.50 77.25 77.05
Resistance levels: 77.80 78.05 78.25
The AUD/USD starts the day trading below 1.0200, Fibonacci resistance level, with hourly indicators showing signs of exhaustion to the upside, yet price holding above 20 SMA currently around 1.0140. Pair may regain the upside only above the 1.0230 static resistance area, 20 SMA in the 4 hours chart. Indicators in this last time frame however, are flat below their midlines which suggest the upside will remain limited.
Support levels: 1.0140 1.0080 1.0020
Resistance levels: 1.0200 1.0230 1.0270
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