EUR/USD: fresh lows on a hawkish FED, 1.0840 next

EUR/USD Current price: 1.0907

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Wednesday saw major pairs confined to tight ranges as investor's attention was centered in the outcome of the FOMC's meeting. And the US Federal Reserve surprised the markets with quite a hawkish tone, sending the greenback sharply higher across the forex  board. The FOMC statement showed that officers acknowledge the latest weak employment figures, but they don't consider it to be a problem as the unemployment rate remains at record lows. Also, the Central Bank dropped the lines referring to international developments, while adding that they will discuss  "whether it will be appropriate to raise the target at its next meeting." This is the first time the FED gives such a clear clue on a date, and despite they did not guarantee a rate hike for December, indeed they put it back in the table. 

The EUR/USD pair  plunged over 150 pips in the first hour after the release, falling below the 1.0900 figure for the first time since early August. The extreme movement, however, shows no signs of reversing in the short term, as the 1 hour chart shows that  the technical indicators remain in extreme oversold levels, whilst the price has retreated sharply from a bearish 100 DMA. In the 4 hours chart, the technical indicators maintain a strong bearish momentum, with the RSI indicator heading south around 22. The pair may consolidate some and even retreat partially, but the bearish trend is firm in place, now looking for a test of the base of these last months' range at 1.0840.

Support levels: 1.0880 1.0840 1.0800

Resistance levels: 1.0920 1.0960 1.1000

EUR/JPY Current price: 132.28

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The EUR/JPY pair plunged to a fresh low of 131.96 on the back of EUR self weakness, having been unable to bounce sharply and maintaining the negative tone seen yesterday. Earlier in the day, the pair completed a pullback to the base of the symmetrical triangle broken last Tuesday before resuming its slide, further anticipating a bearish continuation. Short term, the 1 hour chart shows that the technical indicators have reached oversold levels, currently consolidating around them, whilst the 100 SMA has extended its decline well above the current level, now nearing the mentioned trend line in the 133.30/40 region. In the 4 hours chart, the technical indicators have been rejected from their mid-lines and present strong bearish slopes below their mid-lines, supporting a continued decline for this Thursday.

Support levels: 131.90 131.50 131.10

Resistance levels: 132.60 133.00 133.40 

GBP/USD Current price: 1.5252

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The GBP/USD pair traded around the 1.5300 level for most of the European session, with no data released in the UK. The pair even spiked up to 1.5346 midday, but finally capitulated to dollar's momentum, falling down to 1.5247 post FED statement. The Pound's decline, however, has been limited compared to other currencies, given that the BoE is also in the tightening path, which means that any dollar's strength coming from the FED will be less notable in this particular pair. Nevertheless, the 1 hour chart shows that the pair is consolidating a few pips above the mentioned low, with the 20 SMA heading lower well above the current price and the technical indicators barely  turning flat in oversold territory. In the 4 hours chart, however, the bearish potential is clearer, given that the price as failed to establish above a bullish 20 SMA, whilst the technical indicators have resumed their declines below their mid-lines. 

Support levels: 1.5245 1.5210 1.5170

Resistance levels: 1.5285 1.5320 1.5355 

USD/JPY Current price: 121.23

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The USD/JPY pair advanced around 100 pips ever since the beginning of the American session, boosted by positive news coming from the US. Even before the FED's hawkish statement, the pair was mildly bullish as the US Trade Balance for September showed the deficit shrank to $58.53B from the previous deficit of $67.19B. The pair holds near its daily high around 121.25 ahead of the Asian session opening, and the 1 hour chart shows that the price accelerated higher through its 100 SMA, whilst the technical indicators have lost their upward strength in overbought levels, where  they are now consolidating. In the 4 hours chart, an early dip met buying interest around the 100 and 200 SMAs, both flat in the 119.90/120.00 price zone, whilst the technical indicators head higher after crossing their mid-lines towards the upside, favoring further declines. Nevertheless, the pair can spend the next 24 hours consolidating in a tight range around the current level, ahead of the BOJ's economic policy meeting at the beginning of the upcoming Friday.

Support levels: 121.00 120.70 120.30

Resistance levels: 121.40 121.75 122.10

AUD/USD Current price: 0.7096

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The Aussie was hit twice this Wednesday, with the AUD/USD pair plunging below the 0.7100 level, for the first time since October 6th. The pair fell down to 0.711 early in the Asian session, after the release of Australian third quarter inflation readings, much worse-than-expected. Trimmed CPI for the mentioned period came out at 0.3% against previous 0.6% and expectations of 0.5%, leaving the yearly figure at 2.1%, against the expected 2.4%. The pair accelerated its decline following the FOMC statement, reaching a daily low of 0.7080 before bouncing some. Technically, the 1 hour chart shows that the technical indicators are bouncing some from oversold levels, but that the 20 SMA heads sharply lower around 0.7125, providing an immediate short term resistance. In the 4 hours chart,  the technical indicators are heading sharply lower, despite being in oversold territory, supporting further declines on a break below the mentioned daily low.

Support levels: 0.7080 0.7035 0.6990

Resistance levels: 0.7125 0.7160 0.7195