EUR/USD: FED officers meandering on economic policy

EUR/USD Current Price: 1.1320

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The American dollar kept falling this Wednesday, still weighed by FED's Yellen comments on Tuesday, stressing the need for a cautious stance on interest-rate increases. The EUR/USD pair rose to 1.1364  in spite of weak data coming from Europe as the EU economic sentiment indicator decreased to 103.0 in March, missing expectations. Consumer confidence in the same month held steady at -9.7. Markets also ignored data from the US, showing that the private sector added 200,000 jobs in March according to the ADP survey, beating expectations, whilst February reading suffered a modest downward revision to 205,000.

The dollar bounced some after FED´s Evans said  that the accommodative policy is still appropriate, and that two interest-rate hikes are possible this year, given the strength of the US economy. Seems US policy makers are determinate to confuse investors. Nevertheless, the dollar is poised to end the day sharply lower against all of its major rivals, and technical readings suggest that the latest decline in the EUR/USD pair is barely corrective, given that the price remains near this year high at 1.1375, and the level to break to confirm additional gains, while the technical indicators are retreating partially from overbought readings, far from indicating a continued decline. 

Support levels: 1.1290 1.1245 1.1190 

Resistance levels: 1.1375 1.1420 1.1460

EUR/JPY Current price: 127.42

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The EUR/JPY pair rallied up to 127.81, its highest in over a month, rallying on the back of EUR demand. Despite the Japanese Yen saw its share of gains amid dollar's weakness, the EUR/JPY pair is closing higher for fifth consecutive day, and currently trades above the previous March high around 127.30, indicating that market's sentiment still favors the upside. Technically, the pair has a major resistance, and probable target around 128.50, the 100 DMA. In the meantime, the  1 hour chart shows that the price is well above its moving averages, with the 100 SMA advancing above the 200 SMA, as the technical indicators hold flat within positive territory, reflecting the latest downward move in price, but still maintaining the risk towards the upside. In the 4 hours chart, the technical indicators present some bearish divergences, posting lower highs as the price rallies that are still to be confirmed. In the same chart, the 100 SMA has accelerated its advance above the 200 SMA, both in the 125.00 region, supporting an upward continuation on a break above the mentioned daily high.

Support levels: 127.25 126.80 126.40

Resistance levels: 127.80 128.50 129.10

GBP/USD Current price: 1.4366

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The GBP/USD pair extended its weekly gains up to 1.4458 this Wednesday, but lost nearly 100 pips in the American afternoon, as due to Pound's self weakness, the pair is more sensitive to dollar's intraday rallies. There were no macroeconomic releases, but the UK will publish the third and final GDP estimate for the final quarter of last year early Thursday. The annual rate of growth is expected to remain unchanged at 1.9%, while during the last three months of 2015, growth is expected to have been of 0.5%, as previously estimated. Should the reading beat expectations, the pair may retest this March highs around 1.4515. In the meantime, the technical picture shows that the price is holding above the 61.8% retracement of its latest daily decline at 1.4335, the immediate support. In the 1 hour chart, the price has broken below its 20 SMA, but the technical indicators have turned flat around their mid-lines, limiting chances of further declines in the short term. In the 4 hours chart, the technical indicators have turned south after topping at overbought levels, supporting a continued decline particularly on a break below the mentioned Fibonacci support. Nevertheless, and given that the 20 SMA has advanced further below the current level and is about to cross above the 200 EMA, the longer term outlook is bullish, and may imply buying on dips as low as 1.4250.

Support levels: 1.4335 1.4290 1.4250

Resistance levels: 1.4420 1.4460 1.4515 

USD/JPY Current price: 112.47

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The Japanese Yen strengthened during the past Asian session, with the USD/JPY pair falling down to 112.01 during the European morning, as dovish words by FED's Chief Yellen kept the dollar in sell-off mode for most of the day. Early news showed that Japan's  preliminary Industrial production for April dropped 6.2% monthly basis and 1.5% compared to a year before, slightly below expected. Later on the day, the good employment readings coming from the US helped the pair in recovering ground up to 112.67, before it turned back south. The 1 hour chart shows that the technical indicators have turned south after reaching their mid-lines whilst the price hovers around a horizontal 200 SMA, far below the 100 SMA at 113.10, and the level to break to consider an upward movement. In the 4 hours chart, the price held below a mild bearish 100 SMA for most of the day, and even met selling interest on approaches to it, which reflects that sellers are still in control of the pair. In the same chart, the Momentum indicator is slowly turning south well below its 100 level, while the RSI hovers around 40, in line with the dominant bearish trend.

Support levels: 112.40 111.90 111.50 

Resistance levels: 113.10 113.35 113.70 

AUD/USD Current price: 0.7665

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The AUD/USD pair rallied up to 0.7708, a fresh 8-month high, but failed to hold on to gains above the 0.7700 figure, and retreated in the US afternoon, alongside with commodities and stocks. Nevertheless, the pair recovered quickly from a session low set at 0.7642, as investors are still buying the Aussie on dips. The 1 hour chart supports further gains, as the price is still developing above a bullish 20 SMA, whilst the technical indicators have turned north within bullish territory, after correcting overbought readings. In the 4 hours chart, the price is also well above a bullish 20 SMA, while the technical indicators are beginning to turn lower around overbought levels, suggesting some further consolidation below the mentioned 0.7700 level, rather than signaling a downward extension. If the pair extends its gains above 0.7710, the immediate resistance, the pair can rally towards the 0.7800 price zone this Thursday, with a daily close beyond this last, increasing chances of a continued advance up to 0.8000 later this month.  

Support levels: 0.7610 0.7570 0.7525 

Resistance levels: 0.7710 0.7765 0.7800