EUR/USD: poor US data triggers dollar sell-off

EUR/USD Current price: 1.1440

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Markets are replicating Tuesday's behavior today, with risk aversion dominating the Asian session, European equities opening lower, and the EUR/USD pair advancing to a fresh high of 1.1427, but unable to rally. During the European morning, macroeconomic data showed that Industrial Production in the EU fell by 0.5% in August, whilst inflation readings in Italy, France and Spain, all came out negative, although failed to affect the market. Early US session, the country released is PPI figures for September which resulted much worse-than expected, down yearly basis by 1.1%, whilst the core reading ex Food & Energy came out at 0.8%, from previous 0.9% and against 1.2% expected. Retail Sales during the same month, grew by 0.1% monthly basis, with the core reading down 0.3%, also disappointing investors. 

The EUR/USD pair  extended its advance beyond the  1.1440 level, and the short term picture supports additional gains, given that the price met intraday buying interest on pullbacks towards a bullish 20 SMA, whilst the technical indicators head sharply higher above their mid-lines. In the 4 hours chart, the technical picture is also bullish, despite the RSI indicator stands in extreme overbought levels. The pair has a strong midterm resistance in the 1.1460 region, and will likely find some selling interest around it, yet a break above it should lead to a steady advance towards the 1.1500 region during the upcoming hours.

Support levels: 1.1420 1.1480 1.1340 

Resistance levels: 1.1460 1.1500 1.1540

GBP/USD Current price: 1.5415

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The GBP/USD pair reversed its Tuesday's losses and erased almost all of its latest losses, on the back on a mixed UK employment report that showed that the unemployment rate fell to its lowest since 2008, whilst wages continued to grow during September, although below expectations. Also, more people filled for unemployment benefits, but overall, the data put the BOE's back in the raising rates path. The pair advanced up to 1.1.5380 before the release of the US data, breaking higher afterwards, standing now at fresh highs above the 1.5400 level. Technically bullish, the 1 hour chart shows that the technical indicators head sharply higher  in extreme overbought territory, with no aims of changing bias and favoring a continued advance during the US session. In the 4 hours chart,  the price is well above its moving averages, whilst the technical indicators maintain their bullish slopes above their mid-lines, in line with the shorter term outlook.

Support levels:  1.5380 1.5345 1.5310 

Resistance levels: 1.5425 1.5460 1.5500

USD/JPY Current price: 119.35

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Breaking lower, watch 118.55. The USD/JPY pair extended its slow, but steady decline this Wednesday, down to 119.42 amid poor Chinese inflation figures. The CPI for September came out at 0.1% monthly basis, against expectations of a 0.5% advance, whilst yearly basis, it resulted at 1.6% from the previous 2.0%. The producer price index in the same month, declined by 5.9%, matching the previous reading. The pair bounced some ahead of US data, as stocks recovered from their lows, but plunged with poor US inflation and retail sales reading, now struggling around a critical Fibonacci support, the 38.2% retracement of its latest daily fall. The 1 hour chart suggest the decline may now extend, as the technical indicators head sharply lower below their mid-lines, whilst the price extended further below its moving averages. In the 4 hours chart, the picture is pretty much the same, with the technical indicators heading sharply lower near oversold levels. A break below 118.90 will likely see the price testing the base of its latest range around 118.50/60, whilst a break below this last should confirm a midterm bearish continuation towards the 116.60 price zone. 

Support levels: 118.90 118.55 118.10

Resistance levels: 119.70 120.05 120.35 

AUD/USD Current price: 0.7275

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The AUD/USD pair fell briefly below the 0.7200 level, on the back of poor Chinese data fueling risk aversion, but speculative buying interest helped the pair bouncing back up to 0.7277 early in the European session. The 1 hour chart shows that the price is now pressuring the mentioned high, above its 20 SMA and with the technical indicators heading north in positive territory, all of which supports a continued advance. In the 4 hours chart however, the price remains below a bearish 20 SMA, whilst the technical indicators head higher, but below their mid-lines, suggesting additional gains beyond 0.7310 are required to confirm a new leg higher.

Support levels: 0.7250 0.7220 0.7175 

Resistance levels: 0.7310 0.7350 0.7390