Thursday, May 22, 2014

EUR/USD: hanging by a thread


EUR/USD Current price: 1.3651


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The EUR/USD stands pivoting around its daily low after another day of strong US yields, helped by Italian FInMin and Buba’s Weidmann, both hitting the wires with comments on the ECB “ready to use unconventional tools if needed”. Early Europe PMI readings turned out mixed in Europe, which at the end resulted in more uncertainty on what the ECB will have to do next month. In the US on the contrary, fundamental data was mild positive manufacturing PMI up and existing homes sale up for first time this year, albeit below forecasted. 


As for the technical picture, the EUR/USD hourly chart shows 20 SMA gaining bearish slope above current price as indicators stand in negative territory but showing no strength as per the limited intraday range. In the 4 hours chart the bearish bias is a bit stronger, with 20 SMA now capping the upside around 1.3685 and indicators in negative territory. A price acceleration below 1.3640 is still required to confirm further falls, with 1.3570 as next big support in the short term. 


Support levels:  1.3650 1.3610 1.3570


Resistance levels: 1.3690 1.3720 1.3745 



EUR/JPY Current price: 138.97


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Yen crosses managed to continue recovering, albeit not far away from Wednesday’s highs. The EUR/JPY flirted with the 139.00 level, but held right below it for most of the day, with the hourly chart showing price in a tight range right above 100 SMA, and some divergences between indicators: momentum heads lower below its midline, while CCI points for some upward continuation. In the 4 hours chart a slightly positive tone prevails but further technical confirmation is required, probably with a clear break above the 139.40 level, immediate resistance. Once there, the path is pretty clear up to 140.00. 


Support levels:  138.80 138.35 137.90 


Resistance levels: 139.40 139.90 140.40



GBP/USD Current price: 1.6862


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Despite reaching 1.6920 for second day in a row, GBP/USD was unable to extend gains and turned south on UK data: GDP readings matched expectations but public borrowing disappointed, putting the pair under mild pressure. The hourly chart shows price consolidating in the vertex formed by 2 daily trend lines, price below a bearish 20 SMA, and indicators aiming higher in positive territory. But the 4 hours chart shows indicators with an increasing bearish potential approaching their midlines, and price barely above its 20 SMA: some downward acceleration below 1.6850 should result in a deeper downward movement, eyeing the 1.6800 figure in the short term, yet with scope to extend down to 1.6770. 


Support levels: 1.6850 1.6800 1.6770 


Resistance levels: 1.6885 1.6920 1.6960 



USD/JPY Current price: 101.80


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USD/JPY advances to fresh daily highs as US session fades, trading at its highest level in 5 days. The hourly chart shows price managed to overcome 200 SMA now around 101.50 and immediate support, albeit indicators show some bearish divergences still to be confirmed. In the 4 hours chart however, the technical picture is firmly bullish, with indicators presenting a strong upward momentum that supports at least a test of the 102.00 price zone. 


Support levels: 101.50 101.20 100.70 


Resistance levels: 102.00 102.35 102.70



AUD/USD Current price: 0.9222


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Australian dollar upward corrective movement against the greenback stalled at a strong Fibonacci resistance around 0.9270, with the pair easing back towards 0.9200 afterwards. The level however, continues to prove strong, as price recovers some after approaching it, with the hourly chart showing price well below a bearish 20 SMA and indicators still heading lower in negative territory. In the 4 hours chart 20 SMA maintains a strong bearish slope while indicators diverge as momentum recovers toward its midline and RSI maintains the bearish tone. Risk remains to the downside as long as below 0.9270, with a break below the 0.9200 figure required to confirm more falls.


Support levels: 0.9200 0.9170 0.9135


Resistance levels: 0.9270 0.9310 0.9350






EUR/USD: hanging by a thread

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