EUR/USD: pointing to resume its decline

EUR/USD Current price: 1.0881

The dollar ended the day firmer against the common currency, with better-than-expected US data sending the pair below the 1.0900 mark in the American afternoon. Personal income increased $44.4 billion, or 0.3%, in November, while personal consumption expenditures increased $40.1 billion, also a 0.3% advance according to the Bureau of Economic Analysis. In the same month, Real PCE increased 0.3% percent, in contrast to a decrease of less than 0.1% in October. The core PCE, resulted at 1.3% matching the previous month reading. Also supporting the greenback and following a strong 2.9 gain in October, durable goods orders remained flat in November as core capital goods fell for the second straight month, beating expectations of a 0.7 decline. Finally, the University of Michigan’s measure of consumer sentiment rose to 92.6, a five-month high.

Markets are expected to offer little this Thursday, with German markets closed and the US closing earlier ahead of the Christmas holidays that will keep most markets closed on Friday. Reduced, choppy trading is expected to extend into the new year, as the upcoming week will also saw an empty calendar and shortened 3-day week. In the meantime, the EUR/USD pair seems ready to extend its decline, given that the latest upward rally stalled around the 61.8% retracement of the December monthly decline. In the 4 hours chat, the price is now below a mild bullish 20 SMA, whilst the technical indicators have turned flat around their mid-lines, suggesting limited bearish strength at the time being.

Support levels: 1.0860 1.0820 1.0770

Resistance levels: 1.0920 1.0955 1.0990

EUR/JPY Current price: 132.69

View Live Chart for the EUR/JPY

The EUR/JPY pair shed all of its weekly gains amid a weakening EUR, whilst the JPY held to its recent gains triggered by the BOJ last week. The daily chart for the EUR/JPY shows that the price has extended further below a bearish 100 DMA, while the technical indicators are reaching lower lows within bearish territory, all of which maintains the risk towards the downside. Shorter term, the 1 hour chart shows that the technical indicators are aiming to correct higher from oversold territory, but that the price remains well below the 100 and 200 SMAs, with the shortest around 132.15, providing a strong intraday resistance during the upcoming hours. In the 4 hours chart, the price develops below its moving averages, albeit the 100 SMA continues heading higher above the 200 SMA, while the technical indicators have turned flat in negative territory, limiting the possibility of a strong decline.

Support levels: 131.40 130.90 130.50

Resistance levels: 132.15 132.60 133.10

GBP/USD Current price: 1.4866

View Live Chart for the GPB/USD

The GBP/USD pair turned higher this Wednesday, but faltered ahead of the 1.4900 figure, retreating from a daily high set at 1.4899. Holding into gains, the Pound advanced, despite the UK Q3 GDP was finally revised down to 2.1% y/y from the expected reading of 2.3%. The UK also reported Q3 current account at -GBP17.5 B vs. -GBP21.5B consensus. The intraday upward move came after a decline of eight days in-a-row and ahead of the holidays, clearly being triggered by profit taking and position adjustments. From a technical point of view, the downside is still favored, as in the 4 hours chart, the pair is unable to advance above its 20 SMA, while the technical indicators have recovered from overbought territory and continue heading north, but below their mid-lines. The level to watch during the upcoming sessions is the 1.4950 resistance, as only a steady advance above it would lead to a more steadier recovery during the following days.

Support levels: 1.4835 1.4790 1.4760

Resistance levels: 1.4890 1.4920 1.4950

USD/JPY Current price: 120.85

View Live Chart for the USD/JPY

The USD/JPY pair remained confined within a tight range this Wednesday, although closed the day below the 121.00 level, having been trading in the red ever since the day started. The pair is trading a few pips above a daily ascendant trend line coming from 116.13 the low set past August 24th, currently at 120.65, the immediate support, and the daily chart shows that the price is below its 100 DMA, whilst the technical indicators have extended their declines below their mid-lines. For the short term, the 1 hour chart presents a neutral-to-bearish stance, as the technical indicators have turned slightly lower below their mid-lines, whilst the price develops below its 100 and 200 SMAs. In the 4 hours chart the technical indicators are resuming their declines below their mid-lines as the price remains well below their moving averages, in line with the shorter term outlook.

Support levels: 120.65 120.35 119.90

Resistance levels: 121.00 121.40 121.70

AUD/USD Current price: 0.7220

View Live Chart for the AUD/USD

The Australian dollar ended the day with some limited losses against the greenback, having been unable to settle beyond the 0.7240 strong static resistance level. The Aussie was weighed by a retracement in gold prices, although the daily decline was limited by buying interest surging on approaches to the 0.7200 level. From a technical point of view the 1 hour chart shows that the price is below its 20 SMA, while the technical indicators aim slightly higher around their mid-lines, for the most, presenting a neutral stance. In the 4 hours chart, the upside is still favored with the price above a bullish 20 SMA and above the 200 EMA, and the technical indicators holding ground well above their mid-lines, although lacking directional strength.

Support levels: 0.7200 0.7165 0.7120

Resistance levels: 0.7240 0.7280 0.7330

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