EUR/USD: swinging at the pace of stocks

EUR/USD Current price: 1.1225

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The EUR/USD pair closed Thursday with some gains, as investors once again chose to run towards the funding currency in a strong risk aversion environment, particularly during the first half of the day. The pair traded as high as 1.1295 during the American session, following a sharp decline in local indexes, but pulled back from its highs before the closing bell, and trades back below the key resistance around 1.1245. Daily basis, the pair is still unable to recoup above its 20 SMA, whilst the technical indicators hold a neutral stance, clearly reflecting ongoing investors' uncertainty. Data released early in Europe showed that German consumer confidence is expected to decline in October, from its previous 9.9 to an actual 9.6, although the IFO survey showed that business confidence edged higher in September, climbing to 108.5 from a revised 108.4 in August. In the US, data were mixed, with better than expected weekly unemployment claims, and new home sales, this last up by 5.7% in August, but Durable Goods orders declined in August by 2% whilst the core reading came out flat at 0.0%, continue signaling a tepid recovery in the US at the beginning of the third quarter.

Short term, the 1 hour chart shows that the price retreated over 60 pips from its highs, and its approaching a bullish 20 SMA around 1.1210, now the immediate support, whilst the technical indicators maintain their bearish slopes coming from overbought readings, but are still above their mid-lines, far from confirming a downward continuation. In the 4 hours chart, the price is above a bearish 20 SMA, currently around 1.1160, whilst the technical indicators turned south, and are about to cross their mid-line towards the downside, in line with the shorter term view.

Support levels: 1.1210 1.1160 1.1120

Resistance levels: 1.1245 1.1290 1.1335

EUR/JPY Current price: 134.49

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The EUR/JPY pair closed the day pretty much unchanged as the EUR and the JPY moved in tandem against the greenback, all through the day. Hovering around its 200 DMA at 134.40, the short term picture is slightly positive, given that the technical indicators are still above their mid-lines, and the RSI aims higher around 54, although the price is unable to advance beyond a strongly bearish 20 SMA and remains stuck around it. In the 4 hours chart, the outlook is mixed, as the Momentum indicator heads higher above its 100 level, but the RSI indicator turned south around 47, while the price remains well below its moving averages, with the 100 SMA now around 135.00, the level to break to confirm an upward continuation for this Friday.

Support levels: 134.40 133.90 133.30

Resistance levels: 135.00 135.50 135.85

GBP/USD Current price: 1.5229

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The GBP/USD pair extended its decline down to 1.5199, maintaining the negative tone all through the day. The UK released its BBA mortgage approvals data earlier in the day, showing that mortgage borrowing continued to pick up in August according to the report, with active mortgages surging to 46.743K. The pair advanced intraday up to 1.5288, as the dollar fell with Wall Street opening, but reversed course and points to close the day once again in the red. Short term, the 1 hour chart shows that the price is now below a horizontal 20 SMA, which converges with a static resistance level at 1.5250, whilst the technical indicators entered negative territory and maintain their bearish slopes. In the 4 hours chart, the technical indicators hover near oversold territory with limited bearish slopes, whilst the 20 SMA has extended its sharp decline stands now at around 1.5350. Renewed selling interest that sends the pair below 1.5200 should lead to a test of 1.5160, this month low, whilst a break below it should see the bearish momentum accelerating towards the 1.5100 region.

Support levels: 1.5200 1.5160 1.5125

Resistance levels: 1.5250 1.5290 1.5330

USD/JPY Current price: 120.02

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The USD/JPY pair sunk to near the base of this last month range, posting 119.21 before bouncing back sharply in the American afternoon, recovering alongside with Wall Street, which erased most of its intraday losses before the closing bell. The Japanese yen has been trading purely on sentiment, strengthening despite poor Markit manufacturing readings in Japan, showing the economic slowdown coming from China continues spreading into the region. The pair is pressuring the 120.00 level ahead of the Asian opening, with the 1 hour chart showing that the technical indicators have bounced sharply from oversold levels and are aiming to cross their mid-lines towards the upside, whilst the 100 and 200 SMAs, stand flat a few pips above the current level. In the 4 hours chart, the price is back around an horizontal 20 SMA, whilst the technical indicators aim higher around their mid-lines. Overall, the pair maintains the neutral tone seen on previous updates, still contained within Fibonacci levels, and will likely remain so until the next Friday October 2nd, when the US will release its September Payrolls figures.

Support levels: 119.70 119.35 118.90

Resistance levels: 120.00 120.35 120.70

AUD/USD Current price: 0.7026

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The AUD/USD pair sunk to a daily low of 0.6938, before turning sharply higher mid American afternoon, advancing up to 0.7042 before finally stalling. The Aussie suffered by a poor performance in the price of metals, and a steady decline in worldwide stocks during the first half of the day, with the late recovery being a reflection of Wall Street's advance. Technically, the 1 hour chart shows that the price is hovering around the 23.6% retracement of its latest bearish decline, whilst the technical indicators have lost their upward strength, but remain well into positive territory, as the 20 SMA turns higher below the current price. In the 4 hours chart, the technical indicators head higher below their mid-lines, but are far from confirming additional advances, whilst the 20 SMA maintains a strong bearish slope, providing a strong intraday resistance around 0.7050.

Support levels: 0.6954 0.6906 0.6870

Resistance levels: 0.6990 0.7035 0.7070

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