EUR/USD: beware of month-end profit taking

EUR/USD Current price: 1.0965

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The American dollar closed mixed this Thursday, having however, held near its recent highs against most of its rivals. The macroeconomic front was pretty busy, but majors saw limited reactions to the news. Starting with Europe, the region released its confidence figures for October, with main reading resulting at -7.7, matching September number. In Germany, unemployment fell in October, by seasonally adjusted 5K to 2.788 million, while inflation in the same month, rose 0.3% compared to a year before. In the US, the advanced GDP reading for the Q3, came out at 1.5% slightly below the 1.6% expected. Weekly unemployment claims, in the week ending October 23rd, resulted at 260K better than the 263K expected. Worse news came from the housing sector, as Pending Home sales in September declined 2.3%. 

The EUR/USD pair posted a daily high of 1.0985 after in the American afternoon and following soft data, ending the day with some gains around 1.0965. The short term picture however, is far from supporting additional gains, as in the 1 hour chart, the technical indicators have turned flat after recovering above their mid-lines, whilst the price remains well below a bearish 100 SMA. In the  4 hours chart, the technical indicators are heading slightly lower well into negative territory, while the 20 SMA maintains its bearish tone, offering an immediate resistance around 1.1015. Being the last day of the month, investors may take some profits out of the table this Friday although sellers will likely add at higher levels. 

Support levels: 1.0920 1.0880 1.0840 

Resistance levels: 1.1015 1.1050 1.1090

EUR/JPY Current price: 132.79

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The EUR/JPY managed to recover some ground amid a weakening JPY and the EUR upward corrective move, although the pair was unable to regain the 133.00 level. Despite stocks closed generally lower across the world, investors chose to sell the Japanese currency, ahead of the BOJ meeting at the beginning of the Asian session, in which the Central Bank is expected to announce an extension of its ongoing stimulus program. Technically and in the short term, the 1 hour chart shows that the price stalled below a strongly bearish 100 SMA, whilst the Momentum indicator turned flat in overbought territory, and the RSI indicator lacks directional strength around 58. In the 4 hours chart, the technical indicators have managed to correct the extreme oversold readings, but are losing their upward momentum below their mid-lines, whilst the price is far below its moving averages, all of which maintains the risk towards the downside. 

Support levels: 132.60 132.30 131.90 

Resistance levels: 133.10 133.50 134.00 

GBP/USD Current price: 1.5310

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The GBP/USD pair recovered some ground after extending its decline to a fresh 2-week low of 1.5241, ending the day a handful of pips above the 1.5300 figure. Soft US readings gave the pair a boost during the American afternoon, despite macroeconomic readings in the UK also were tepid. Money Supply data in the UK, showed that business lending decreased in October, whist mortgage lending came out at 68.874K against previous 71.03K. The recovery was enough to reverse the short term picture, although the dominant trend is still bearish, given that the pair is trading below a daily descendant trend line coming from October 23rd daily high. The 1 hour chart shows that the price is now above a bullish 20 SMA, whilst the technical indicators maintain their sharp bullish slopes near overbought territory. In the 4 hours chart, the technical indicators have advanced below their mid-lines, but remain in negative territory, whilst the price is struggling around a bearish 20 SMA. 

Support levels: 1.5280 1.5245 1.5200

Resistance levels: 1.5325 1.5360 1.5400

USD/JPY Current price: 121.13

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The USD/JPY pair regained the 121.00 level ahead of the Asian opening, as investors are waiting for the upcoming Bank of Japan economic policy decision. The market has been eyeing this particular meeting as the country will also release its half-year forecast, which will give a clearer picture of the economic situation, and therefore if it needs or not, additional QE. Anyway, if the BOJ announces an expansion of its facility program, the pair will likely rally, although notice that the movement has been largely priced in. An on-hold stance on the other hand, may trigger a more interesting bearish move. Technically, the 1 hour chart shows that the price is holding well above its 100 SMA while the technical indicators have lost their upward strength near overbought territory, in line with further gains. In the 4 hours chart, the outlook also favors the upside, with the Momentum indicator still heading higher well above its 100 level and the RSI holding around 59. 

Support levels: 121.00 120.70 120.30

Resistance levels: 121.40 121.75 122.10

AUD/USD Current price: 0.7076

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The AUD/USD pair extended its decline to a 3-week low of 0.7068 holding nearby by the end of the day, and maintaining the negative tone seen on the previous updates. The Aussie was weighed by a sharp decline in gold prices, but also due to the latest inflation readings, which fueled speculation that the RBA will have to cut rates at least one more time before the year end. Trading below the 0.7200 level, the 1 hour chart shows that the technical readings are biased lower, with the indicators heading south below their mid-lines and the 20 SMA capping the upside around 0.7080. In the 4 hours chart, the 20 SMA has accelerated its decline well above the current level, whilst the technical indicators maintain tepid bearish slopes in oversold territory, all of which points for further declines ahead. 

Support levels: 0.7035 0.6990 0.6955

Resistance levels: 0.7125 0.7160 0.7195