EUR/USD: back around 1.1200, Yellen awaited

EUR/USD Current Price: 1.1201

View Live Chart for the EUR/USD

As markets returned to normal, the greenback got smashed by mixed personal income and spending figures released in the US, as data beat expectations for February, but January's numbers were revised negatively. The all-important PCE inflation number was a huge disappointment, with the headline reading monthly basis down by 0.1%, while the core number came in at 0.1% against previous 0.3%.  Also, the Goods Trade Balance posted a larger-than-expected deficit, of $63.0B. Pending home sales on the other hand, rose 3.5% in February, against January's 3% loss. 

This Tuesday, FED's Yellen is due to deliver a speech titled "Economic Outlook and Monetary Policy" at the Economic Club of New York luncheon, the first time she will speak after the latest FOMC meeting. Investors will be looking closely for any comment regarding rates and whether if she will maintain the dovish tone of the statement, of align with latest FED's speakers and offer a more hawkish wording. 

In the meantime, the American dollar suffered a strong set back early in the US session, down against all of its major rivals. The EUR/USD pair reached a daily high of 1.1219 before retracing towards the 1.1200 level, easing as Wall Street trimmed most of its early losses ahead of the close. The recovery has been pretty significant considering that the price was unable to fall beyond the 61.8% retracement of its latest daily bullish run, but not enough to confirm a continued advance, given that in the 4 hours chart, the price is currently struggling around the 50% retracement of the same rally, whilst the technical indicators have lost their bullish potential after regaining positive territory. The upside however, is now favored as long as the 1.1160 support holds, with an upward acceleration expected on a break above 1.1245.

Support levels: 1.1160 1.1120 1.1085 

Resistance levels: 1.1245 1.1290 1.1330

EUR/JPY Current price: 126.97

View Live Chart for the EUR/JPY

A weaker Japanese yen pushed the EUR/JPY pair higher at the beginning of the day, while poor US data helped it reach a daily high of 127.04. Investors sell the safe-haven currency on speculation that PM Abe will announce a fiscal stimulus plan and delay the increase of the sales tax, given latest inflation figures, well below the Central Bank´s 2.0% target. The short term picture for the EUR/JPY pair is positive, given that the price rallied above its 100 and 200 SMAs in the 1 hour chart, with the shortest having advanced above the largest at the beginning of the day, and currently around 126.05. However, the price remains below this March high at 127.28, the level to beat to present a more constructive outlook. In the 4 hours chart, the technical indicators have lost their upward strength, but hold within positive territory, while the 100 SMA has crossed above the 200 SMA below the current level for the first time since early February, indicating a limited downward potential at the time being. 

Support levels: 126.65 126.05 125.40 

Resistance levels: 127.30 128.80 129.40

GBP/USD Current price: 1.4241

View Live Chart for the GBP/USD

The GBP/USD pair advanced up to 1.4282, the highest since last Tuesday, fueled by poor US data. The Sterling saw some limited demand at the beginning of the day, as most European and Asian markets were closed on holiday, but downbeat US PCE inflation boosted the advance up to the mentioned high. There were no macroeconomic releases in the UK, and the calendar will remain empty until the release of GDP figures on Thursday, which means that the pair will be largely driven by dollar's self strength/weakness. The upward potential is still quite limited, given that in the 4 hours chart, the pair met selling interest around its 200 EMA, whilst the technical indicators have lost their bullish strength after recovering above their mid-lines. Furthermore, the recovery stalled around the 50% retracement of its latest bearish run, and the price is currently resting above the 38.2% retracement of the same rally, at 1.4230, the immediate support. A break below this last, should the see pair returning to the lower band of the 1.4100 level, which will also increase  the risk towards the downside, eyeing levels below the 1.4000 figure for later on this week. 

Support levels:  1.4230 1.4190 1.4145 

Resistance levels: 1.4285 1.4330 1.4370

USD/JPY Current price: 113.35

View Live Chart for the USD/JPY 

The USD/JPY pair advanced to 113.59, the highest in ten days, but with no actual follow through as tepid US macroeconomic releases stalled the early advance. The Japanese yen weakened as speculative interest is expecting PM Abe to announce some sort of fiscal stimulus and a delay in the planned tax hike, as soon as this Tuesday. Roughly 30 pips away from its Friday's close, the pair has been rising for seven days in-a-row, but  it´s still worrisome the fact that the pair remains below 2015 lows, in spite of the negative deposit rate established by the BOJ late February. Technically, the 1 hour chart shows that the Momentum indicator has entered negative territory at the beginning of the US session, with the RSI is heading south around 51. In the same chart, the 100 and 200 SMAs remain below the current level, with the 100 SMA being the line in the sand at 112.30, as a decline below it should open doors for a steeper decline. In the 4 hours chart, however, the technical indicators lack directional conviction, but remain within positive territory. The pair has multiple intraday highs in the 113.70 region, which means only an acceleration beyond the level will favor additional gains up to the 114.45 price zone. 

Support levels: 112.75 112.30 111.90

Resistance levels: 113.70 114.10 114.45

AUD/USD Current price: 0.7533

View Live Chart for the AUD/USD

The Australian dollar swung at the pace of commodities, ending the day higher against the greenback around 0.7535. The pair traded as high as 0.7557 early in the US session, but was unable to rally as improved US housing data put a halt to dollar's decline. The AUD/USD pair has tested the 23.6% retracement of the 0.6827/0.7679  run at 0.7475 hast Friday, as bulls are still defending the bullish trend. However, the pair is still far from recovering its bullish momentum, as in the daily chart, the price is struggling to recover above its 20 SMA, whilst the Momentum indicator keeps heading, now breaking below its 100 level. Shorter term, the 1 hour chart presents a neutral-to-bullish stance, as the price stands a few pips above a mild bullish 20 SMA, while the technical indicators head nowhere, right above their mid-lines. In the 4 hours chart, the technical indicators are hovering around their mid-lines, while the price is around a bearish 20 SMA, unable to rally beyond it, all of which indicates that buying interest is limited at current levels.

Support levels: 0.7510 0.7475 0.7440 

Resistance levels: 0.7560 0.7605 0.7640