The American dollar got a short-lived breath of fresh air this Wednesday

EUR/USD

The American dollar got a short-lived breath of fresh air this Wednesday, backed by a strong ADP survey and a solid ISM Manufacturing PMI,  both for January. The first indicated that the private sector added 246,000 new jobs in December, whilst the second showed that manufacturing growth rose for a fifth consecutive month, with the index up to 56.0 from previous 54.7, the highest reading since November 2014. But the US  FOMC meeting failed to sustain modest dollar's gains, resulting in the EUR/USD pair ending the day marginally lower around 1.0776. 

Data coming from Europe was EUR supportive, as the EU final Markit Manufacturing PMIs for January  confirmed that growth in the region entered 2017 with a strong footing. The German manufacturing sector growth hit a three-year high in January, despite a modest downward revision to 56.4 from the initial estimate of 56.5, while for the whole region, the final reading was revised higher, up to 55.2 from 55.1 its highest in over six years. 

Technically, the pair is poised to extend its advance, given that in the 4 hours chart, the price bounced from a bullish 20 SMA, around 1.0735, whilst technical indicators recovered their bullish slopes after a modest downward correction within positive territory. The Momentum indicator in the mentioned chart heads higher at fresh weekly highs, supporting additional gains for the upcoming sessions. Still the pair faces a tough resistance between 1.0800 and 1.0840, where it bottomed for most of 2015 and 2016, while the 50% retracement of the November/January decline stands a 1.0820. An advance beyond this region is required to confirm a new leg higher, towards the 1.0930 price zone, the 61.8% retracement of the mentioned decline.

Support levels: 1.0650 1.0610 1.0565

Resistance levels: 1.0710 1.0740 1.0770

USD/JPY

The USD/JPY pair settled a few pips above the 113.00 level, recovering modestly, but still at risk of a bearish extension, given market's reaction to FOMC's latest monetary policy meeting outcome. The pair traded in the green for most of the day, supported by easing risk aversion, as stocks in Asia and Europe recovering following strong Chinese growth figures, and extended up to 113.93 following better-than-expected US employment and manufacturing data. Also, positive data coming from Japan at the beginning of the day, helped ease risk aversion among Asian investors, as the Markit/Nikkei Japan Final Manufacturing came in at 52.7, up from 52.4 in December, indicating that manufacturing activity expanded at the fastest pace in almost three years as export orders surged. But the pair retreated after the FED failed to trigger dollar's demand, and with the pair having been rejected from the 114.00 region, the risk remains towards the downside. In the 4 hours chart, the price remains well below a bearish 100 SMA, currently around 114.00, whilst the Momentum indicator heads higher within bearish territory, but the RSI indicator hovers around 43 with no clear directional strength. The pair fell down to 112.82 as an immediate reaction to the FED, being now the level to break to confirm additional declines for this Thursday. 

Support levels: 112.80 112.50 112.00 

Resistance levels: 113.45 113.90 114.30

GBP/USD

The GBP/USD pair rallied to fresh 2-month highs, printing 1.2679 and settling a few pips below the level as the dollar eased on the back of a neutral FED. Data coming from the UK this Thursday proved once again that the UK economy is Brexit-resilient, as the Nationwide House Price Index showed that the annual rate of house price growth in January was of 4.3%, slightly  below December´s growth rate in  of 4.5%, whilst the Markit Manufacturing PMI for the same month resulted at 55.9, slightly below December's 56.1, but still indicating strong growth. This Thursday, not only the BOE will have its monetary policy meeting, including the quarterly inflation forecast, but also, the government is expected to publish a document setting out its plans for Brexit, as  Prime Minister Theresa May told Parliament on Wednesday. The Parliament, which is discussing the Brexit bill, is waiting for that white paper to decide whether or not the UK government can trigger the Art. 50 and began the process of leaving the European Union.  From a technical point of view, the pair could advance further this Thursday, as in the 4 hours chart, the price is well above a now bullish 20 SMA, whilst technical indicators consolidate near overbought territory, in line with the low volumes at this time of the day. 

Support levels:  1.2625 1.2580 1.2535

Resistance levels: 1.2680 1.2730 1.2770 

AUD/USD

The AUD/USD pair continued trading uneventfully in a well-limited range this Wednesday, although  the risk is towards the upside, given that the pair holds near the 0.7600 level, and intraday downward moves are being quickly reversed. Chinese data and a recovery in base metals supported the Aussie at the beginning of the day, whilst the FOMC neutral stance put it on positive territory at the end of the day. The fact that the pair can break towards the upside, despite broad dollar's weakness, may make bulls hesitate if the ongoing situation persists, but it will take a break below 0.7450 to confirm a bearish extension. Spikes above 0.7600 have been so far reversed, so it will take some follow-through beyond 0.7610 to confirm additional gains which can see the price advancing up to 0.7700. In the 4 hours chart, the price has held above a flat 20 SMA, but technical indicators turned lower, currently around neutral territory, giving no clues on what's next for the pair. 

Support levels: 0.7530 0.7490 0.7450 

Resistance levels: 0.7610 0.7645 0.7690

Dow Jones

After trading most of the day in the red, US major indexes closed in positive territory, amid strong Apple and Facebook earnings reports, this last, released right after the close. The Dow Jones Industrial Average gained 26 points and closed at 19,890.94 while the Nasdaq Composite added 0.50% to settle at 5,642.65. The S&P closed mostly flat at 2,279.55. A FED less hawkish than expected, also supported the recovery of US equities  as a rate hike seems unlikely at the time being. Technically, the Dow presents a neutral stance, as in the daily chart, the price stands around a horizontal 20 DMA, whilst technical indicators head nowhere around their mid-lines. Shorter term, the 4 hours chart shows that the 20 SMA capped the upside on an early advance, now standing at 19,929, while technical indicators head higher, but still within negative territory, not enough to confirm further recoveries ahead. Once the dust settle, seems likely that investors will keep on unwinding the Trump-trade during the upcoming days, and therefore stocks will probably resume their slide. 

Support levels: 19,844 19,806 19,745    

Resistance levels: 19,929 19,975 20,036

FTSE 100

London equities market advanced this Wednesday, adding 8 points to settle at 7,107.65, despite a strong Pound. The Sterling managed to advance further against its American rival at the beginning of the day, but mining-related shares gained on the back of Chinese growth data. China's official manufacturing PMI for January came in at 51.3, beating expectations of 51.4, and slightly below December reading of 51.4. Among the best performers  were Anglo American, which closed up 2.89%, while Antofagasta added 2.64%. The worst performer was Mediclinic International, down 3.36%, followed by Associated British Foods which closed down 2.88%. From a technical point of view, the daily chart shows that the benchmark remains range bound below its 20 DMA, whilst technical indicators maintain their bearish slopes within negative territory, maintaining the risk towards the downside. In the 4 hours chart, selling interest kept surging on advances towards a bearish 20 SMA, while technical indicators remain within negative territory, but with no directional momentum. 

Support levels: 7,104 7,057 7,011 

Resistance levels: 7,154 7,183 7,241 

DAX

European equities recovered ground alongside with the greenback, as local government bonds and safe-haven retreated from Wednesday's highs on the back of solid US data. Also, backing the positive mood among local investors were news indicating that the manufacturing activity in the region reached a multi-year high at the beginning of the year. The German DAX closed the day at 11,659.50, up by 1.08% or 124 points. Financial-related equities recovered from Tuesday's setback and within the DAX led advancers, with Deutsche Bank up 4.02% and Commerzbank adding 2.23%. The DAX's daily chart shows that the index settled a few points above a horizontal 20 SMA, whilst technical indicators have bounced modestly from their mid-lines, overall neutral. In the 4 hours chart, the index is below a modestly bearish 20 SMA, whilst technical indicators recovered from oversold readings, but lost upward strength and turned flat within bearish territory. 

Support levels: 11,609 11,550 11,000 

Resistance levels: 11,711 11,770 11,804

Nikkei

The Nikkei 225 closed the day with gains, up by 107 points or 0.56% to settle at 19,148.08. The Japanese benchmark recovered some of the ground lost earlier this week as the Japanese Yen pared gains and recover the ¥113.00 level against the greenback. The steel sector was the best performer, following a strong earnings forecast from JFE Holdings, which also confirmed the construction a steel plant in Mexico with US company Nucor.  The automakers sector benefited from the news, with Mitsubishi leading winners' list with a 12.40% gain. Technically, the daily chart for the index shows that its currently struggling around a bearish 20 DMA, whilst technical indicators have turned higher, but hold within neutral territory, not enough to confirm further gains. The intraday high has been set at 19,280, and a break above it is required to see the index advancing further. In the 4 hours chart, the mentioned high converges with the 200 SMA,  whilst technical indicators are stuck within neutral territory,  further supporting the case for an upward extension once the mentioned resistance is cleared. Support levels: 19,112 19,040 18,972 Resistance levels: 19,215 19,280 19,341

Gold

Spot gold settled at $1,209.40 a troy ounce, having trimmed most of its intraday losses after FOMC monetary policy meeting resulted a non-event, with the US Central Bank leaving its policies on hold and offering no clues on upcoming moves. The bright metal fell down to 1,198.16 early US session, as strong American data triggered some dollar demand that anyway was short lived. The absence of information on the  FED statement, clearly indicates that policy makers are still uncertain about what's next for the US economy under the new administration. From a technical point of view, the daily chart shows that the price managed to end the day above the 1,204.50 Fibonacci level, but also that it is still stuck around a bearish 100 SMA. Technical indicators in the mentioned time frame indicate lack directional strength, with the Momentum stuck around its 100 level and the RSI heading modestly lower around 59, not enough to confirm a downward extension. In the 4 hours chart,  technical indicators retreated from overbought readings, but the price held above the 20 and 100 SMAs, both converging around 1,202.00, limiting chances of a downward move. 

Support levels: 1,204.50 1,196.10 1,187.80    

Resistance levels: 1,220.05 1,229.80 1,241.35

WTI Crude Oil

Crude oil prices gained on the back of the FED, with dollar's weakness helping the commodity to shrug off the disappointing news for oil's market. West Texas Intermediate crude oil futures settled around $53.50 a troy ounce, recovering from a daily low of $52.23, achieved after the release of the US EIA stockpiles report, which showed a major build in inventories. US crude stockpiles for the week ended Jan. 27 rose 6.47 million barrels, nearly doubling expectations of a 3.840 million gain. West Texas Intermediate crude futures daily chart maintains a neutral technical stance, as the commodity is above a still flat 20 DMA, whilst technical indicators turned modestly higher, but hold within neutral territory. In the 4 hours chart, the upside seems a bit more constructive, given that the price is currently standing above its moving averages, all together in a 20 cents range, and that technical indicators maintain their upward slopes within bullish territory.  

Support levels: 53.20 52.65 52.00

Resistance levels: 53.90 54.30 55.10