EUR/USD: it's all about Draghi now

EUR/USD Current Price: 1.1016

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Majors continued trading on sentiment this Wednesday, with little in the macroeconomic calendar to trigger moves, although uncertainty over what the ECB may have to offer this Thursday, kept the EUR/USD pair on the move. As largely expected, the pair traded within its latest range, down to 1.0945 as risk aversion dominated the first half of the day, but then up towards 1.1034, as stocks ended higher in Europe and turned north in the US, pushing the negative sentiment back. All eyes are now on the European Central Bank, largely expected to extend its economic facilities, in light of latest deflationary reading in the EU. According to an initial estimate, inflation fell by 0.2% during February, back into negative territory after four months holding right above zero. Additionally, the Central Bank has suggested they are willing to cut the deposits rate by 10bp, but there's a good chance the decision will be reinforced with another measures. 

The American dollar traded generally lower across the board, helping the pair to recover ground during the American session. Anyway, upcoming moves well solely depend on how the market "reads" Draghi´s  decisions and statement. Technically, the pair has been pretty much stuck around the 1.1000 region this week, with spikes beyond the figure being quickly reversed by profit taking. Nevertheless, strong buying interest surged on dips, generally keeping the risk towards the upside. In the 4 hours chart, the price has now recovered above its 20 SMA while the technical indicators head north within positive territory, although the pair is still in trouble when it comes to overcome the 38.2% retracement of its latest decline around 1.1040. Some follow through beyond the level on a positive outcome, can see the pair rallying up to 1.1120/60, the next strong static resistance area. 

Support levels: 1.0940 1.0910 1.0880 

Resistance levels: 1.1045 1.1080 1.1120

EUR/JPY Current price: 124.65

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The EUR/JPY pair recovered from a daily low of 123.05 posted early Asia, erasing most of its Tuesday losses, as the EUR strengthened, while the JPY weakened on the back of improved risk sentiment. The daily chart, however, shows that the pair has set a lower low and a lower high daily basis, which means that the background bearish trend remains firm in place. Shorter term, and according to the 1 hour chart, the advance has sent the price back above its 100 and 200 SMAs that anyway remain horizontal, showing no actual directional strength. In the same chart, the technical indicators are giving some signs of upward exhaustion, turning south within overbought levels and suggesting the rally has stalled for now. In the 4 hours chart, the technical picture supports the upside, given that the price is advancing above its 100 SMA while the technical indicators are heading south above their mid-lines. The pair needs to extend above the 124.90 resistance to be able to recover further ground, with a recovery beyond 126.00 required to confirm a bullish tone in the pair. 

Support levels: 123.65 123.20 122.80

Resistance levels: 124.40 124.90 125.30

GBP/USD Current price: 1.4228

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The GBP/USD pair remained confined to a tight range this Wednesday unmotivated by tepid Manufacturing and Industrial Production data. The figures came out mixed, in balance better-than-expected, but overall reflecting limited growth in the sector. According to the official release, Industrial Production is estimated to have increased by 0.3% monthly basis, below market expectations of 0.5% but reversing the previous 1.1% decline. Manufacturing in the same period rose by 0.7%, against the 0.2% expected and than the previous revised -0.3%. The pair however, wobbled around the 1.4200 figure, having met some buying interest on declines towards the 1.4170 price zone, but unable to advance beyond 1.4240. From a technical point of view, the pair presents a neutral short term stance according to the 1 hour chart, in where the price stands a few pips above a horizontal 20 SMA and the technical indicators hold flat within positive territory. In the 4 hours chart, the pair presents a mild bullish potential with the price also hovering above its 20 SMA, but the technical indicators aiming higher above their mid-lines. 

Support levels: 1.4165 1.4120 1.4070

Resistance levels: 1.4240 1.4290 1.4335

USD/JPY Current price: 113.13

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The USD/JPY pair recovered from a daily low of 122.22, stretching higher in the US afternoon, being the yen the only major that's losing ground against a broadly weaker greenback this Wednesday. Higher US yields, with the 10y note yield up to 1.89%, have fueled the advance during the American session, sending the pair back above the 113.00 level. Short term, the pair presents a strong upward potential, as in the 1 hour chart, the technical indicators head sharply higher well above their mid-lines, although the price is still below its 100 and 200 SMAs, with the shortest now around 113.30. In the 4 hours chart, the technical indicators have extended their recoveries from oversold territory, and keep heading higher, but below their mid-lines. The pair has a strong resistance around 113.50, the 23.6% retracement of the latest daily slump, and it will take a recovery above it to see a more upward constructive scenario. However, it will take a break above 115.05, the 38.2% retracement of the same rally, to talk about a bullish trend developing in the pair.

Support levels: 112.85 112.50 112.15 

Resistance levels: 113.50 114.00 114.60

AUD/USD Current price: 0.7514

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The unstoppable rally of the Aussie has resulted in the AUD/USD regaining the 0.7500 level for the first time since early July 2015. The pair rallied on the back of a recovery in oil prices, following a decrease in US stockpiles, and improved market sentiment that sent European and American indexes into positive territory.  The pair seems to finally have broken above the roof of the daily ascendant channel, as a short term decline towards 0.7460 have quickly met buying interest. Such break should signal an increase in the bullish potential of the AUD/USD pair in the longer term. Technically, the 1 hour chart shows that the technical indicators eased some from extreme overbought territory, but are far from suggesting a downward move, while the 20 SMA heads higher around the mentioned 0.7460 level. In the 4 hours chart, the pair bounced from a still bullish 20 SMA earlier in the day, while the technical indicators have lost upward strength near overbought levels, but are also far from signaling a downward move, meaning some consolidation could be expected before a new leg north.

Support levels: 0.7460 0.7420 0.7375

Resistance levels: 0.7530 0.7585 0.7610