EUR/USD: upside risk prevails

EUR/USD Current price: 1.1364

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There was little action across the forex board this Monday, due to an empty macroeconomic calendar and a holiday in North America that kept US and Canadian banks closed. Investors' sentiment was positive at the beginning of the day, with Asian share markets closing with strong gains, but the good mood faded as there was no follow through. Additionally, a sharp decline in oil prices has triggered some risk aversion during US trading hours, leading to some JPY and USD gains. FED's officers were on the wires, with Dennis Lockhart repeating last Friday's speech, once again saying that there is enough data for an October hike, although more data will be available in December. Chicago FED President Charles Evans, offered a less dovish than-usual stance, as he has been pledging for a 2016 rate hike, but said that he could be persuaded to support a rate hike this year, so long as the increases are gradual. 

As for the EUR/USD pair, it has been trading in a 50 pips day all day long, meeting buyers on approaches to the 1.1350 price zone, but unable to advance beyond the 1.1400 figure. The pair however, holds to its latest gains, which maintains the risk towards the upside, regardless a downside corrective movement towards the 1.1300 price zone.  Short term, the 1 hour chart shows that the price is now below a horizontal 20 SMA, whilst the technical indicators head lower below their mid-lines, supporting a short term downward corrective move. In the 4 hours the technical indicators have eased partially from overbought readings, but the Momentum indicator is aiming higher well above its mid-line, whilst the 20 SMA presents a strong upward slope below the current level, supporting additional advances on a break above 1.1400. 

Support levels: 1.1350 1.1320 1.1290

Resistance levels: 1.1400 1.1430 1.1460 

EUR/JPY Current price: 136.33

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The EUR/JPY closed the day with some limited gains, as the JPY strengthened during the American session, on a flip in market's sentiment towards risk aversion. The pair however, remained in a tight range and the daily chart shows that it holds above the 100 DMA, currently around  136.05, the immediate support. Short term, the 1 hour chart shows that the technical indicators present mild bearish slopes below their mid-lines, whilst the price is well above a bullish 100 SMA, currently around 135.60. In the 4 hours chart, however, the Momentum indicator points to resume its advance after correcting overbought readings, whilst the RSI indicator holds around 62, suggesting the pair may recover towards the 137.00 region. 

Support levels: 136.05 135.60 135.20

Resistance levels: 136.50 136.95 137.30 

GBP/USD Current price: 1.5347

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The GBP/USD pair ended the day with limited gains, once again finding buying interest on retracements towards the 1.5300 region, although limited by Friday's high of 1.5382, also the 61.8% retracement of the latest daily decline. In the UK,  the Conference Board Leading Economic Index increased by 0.2% in August, above July reading of -0.3%, but the indicator can hardly be considered a market mover, producing little effect on the Pound. On Tuesday, the UK will release inflation and PPI figures for September, which if they result above expected, can give the GBP a nice boost through the mentioned resistance. Technically, the 1 hour chart shows that a mild positive tone prevails, as the price stands above a mild bullish 20 SMA, whilst the technical indicators stand above their mid-lines, lacking directional strength amid reduced trading volumes. In the 4 hours chart, the price is a few pips above the 20 SMA and the 200 EMA, both converging in the 1.5330 region, whilst the Momentum indicator bounces from its mid-line and the RSI indicator consolidates around 60, all of which favors an upward continuation, as long as retracements down to 1.5260 continue to attract buying interest. 

Support levels: 1.5315 1.5260 1.5220

Resistance levels: 1.5385 1.5430 1.5470

USD/JPY Current price: 119.98

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The Japanese yen advanced against the greenback, sending the USD/JPY pair down to 119.88 intraday. The pair remains confined to its usual range around the 120.00 level, and seems it will remain so until the month's end, when both, the BOJ and the FED will have their monthly economic policy meetings. Despite the range, the downside is technically favored given that the pair continues developing well below its 100 and 200 SMAs in the daily chart. Intraday, the 1 hour chart shows that the technical indicators are aiming to recover, but remain in negative territory whilst the 100 and 200 SMAs converge around 120.05 offering an immediate intraday resistance.  In the 4 hours chart, the price has been moving back and forth around its moving averages, whilst the technical indicators hold around their mid-lines, all of which reflects the ongoing range. 

Support levels: 119.60 119.35 118.90

Resistance levels: 120.05 120.35 120.70 

AUD/USD Current price: 0.7359

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The AUD/USD pair surged to a fresh 2-month high of 0.7381, getting a lift from gold prices, as spot surged to a daily high of $1,169.04 a troy ounce, a level not seen since late August. The Aussie outperformed during the Asian session, advancing against the greenback for a tenth day in-a-row, which increases the risk of a downward corrective movement, despite AUD's strength. Correcting lower from the mentioned high, the 1 hour chart shows that the price holds above its 20 SMA, whilst the Momentum indicator is now horizontal well above the 100 level and the RSI indicator heads lower around 57, supporting a limited bearish move at the time being. In the 4 hours chart, the technical indicators are turning south, but still in extreme overbought levels, not yet confirming a downward move, whilst the 20 SMA maintains a strong bullish slope around 0.7280, where buying interest may surge, if reached, to defend the ongoing bullish trend. 

Support levels: 0.7350 0.7310 0.7280 

Resistance levels: 0.7400 0.7440 0.7485