Chinese data disappoints

EUR/USD

Better-than-expected US data on Friday finally triggered some action across the board, sending the greenback up against most of its major rivals, but the yen. US April retail sales surprised to the upside by rising 1.3% compared to March, whilst the University of Michigan consumer confidence for May has jumped to 95.8 from 89.0 relative to a consensus forecast of 89.5. 

Over the weekend, Chinese data disappointed, suggesting the economic slowdown of the world's  second largest  economy is far from over, and therefore suggesting markets will be dominated by risk aversion at the weekly opening. Chinese Industrial Production surged by 6.0%in April, below the 6.8% printed in March and market's expectations of 6.5%. Retail Sales in the same month rose by 10.1% yearly basis, missing expectations of a 10.6% advance.  The negative news may result in some downward gaps at the beginning of the week, particularly in the JPY and the AUD against the greenback.

The EUR/USD pair, briefly fell below the 1.1300 level before settling a few pips above it by the end of the week. The technical picture favors some additional declines in the pair for the upcoming days,  particularly on a break below 1.1280 a strong static support, as in the daily chart, the price has broken below its 20 SMA, for the first time since late April, whilst the technical indicators are crossing into negative territory. In the 4 hours chart, the price is now below its moving averages that anyway converge in a tight range, whilst the Momentum indicator heads south well below the 100 line and the RSI indicator consolidates near oversold readings, also maintaining the risk towards the downside. 

Support levels: 1.1280 1.1240 1.1200

Resistance levels: 1.1340 1.1370 1.1410

USD/JPY

The USD/JPY pair surged up to 109.54, its highest for the week on Friday, following the release of encouraging US data, but quickly reversed course and closed below the 109.00 figure although up for the week. BOJ's Governor Kuroda reiterated on Friday that the Central Bank will not hesitate to ease more if needed, but his wording lately, is barely enough to prevent the JPY from appreciating strongly. Daily basis, the advance has stalled at the 61.8% retracement of the 111.88/105.54 decline at 109.54, having therefore completed a major upward corrective move. In the same chart, the technical indicators head lower below their mid-lines, whilst the price is far below its moving averages, all of which maintains the dominant bearish trend alive. In the 4 hours chart, the price has been trapped between its 100 SMA, at 108.60, and the 200 SMA, around 109.20,  for most of this past week, with limited spikes outside the range being quickly reversed.  A downward acceleration below 108.20 should increase chances of a bearish continuation, down to the 107.10 region, particularly if risk aversion extends beyond the beginning of this week. 

Support levels: 108.60 108.20 107.70

Resistance levels: 109.00 109.50 110.00 

GBP/USD

The Pound remained under selling pressure for a third consecutive week, weighed by uncertainty over the economic future of the kingdom, ahead of the Brexit referendum, next June 23rd. The GBP/USD pair bottomed at 1.4339 before bouncing modestly, unable anyway, to regain  1.4370, the 61.8% retracement of the latest daily bullish run between 1.4130 and 1.4769. Last Thursday, the Bank of England maintained its economic policy on hold as the Brexit referendum looms,  resulting in high levels of uncertainty over the economic future of the UK. Despite polls suggest the "remain" side will win, speculative interest will likely remain away from the Pound until the end of June. From a technical point of view, and according to the daily chart, the bearish potential is big given that the technical indicators head lower within negative territory and with sharp bearish slopes, whist the latest downward acceleration in price has sent it well below a now flat 20 SMA. In the 4 hours chart, the 20 SMA gains bearish tone above the current level, whilst the Momentum indicator keeps heading south below its mid-line, and the RSI hovers around 39, all of which supporting a continued decline, particularly on a break below 1.4330, the immediate support.

Support levels: 1.4330 1.4290 1.4250

Resistance levels: 1.4400 1.4440 1.4480 

AUD/USD

The Aussie broke below the 0.7300 figure against the greenback for the first time since February this year, accelerating its downward move on  worldwide stocks' declines and looking now vulnerable to further losses. Australia will release the RBA´s latest Minutes this week, and the monthly jobs report for April, which may fueled the decline, particularly if Governor Stevens suggests another rate cut for the upcoming months. The AUD/USD pair closed lower for a third consecutive week, and moreover, broke below the 50% retracement of this year's rally on Friday, with the bearish trend firmly in place according to the daily technical readings, given that the Momentum indicator hovers near oversold territory, while the RSI indicator presents a bearish slope around 30. The 20 SMA in the mentioned time frame has turned sharply bearish and stands around 0.7540, too far away to be relevant at the time being, but  a clear sign of bears' strength. Shorter term, technical indicators are also biased south near oversold territory, whilst the 20 SMA converges with the mentioned 50% retracement in the 0.7330 region, a level that if reached, will likely attract selling interest.

Support levels: 0.7250 0.7210 0.7165

Resistance levels: 0.7290 0.7330 0.7370 

Dow Jones

All of the US three major indexes closed in the red last Friday, with the DJIA plummeting 185 points to 17,535.32, its lowest close since early April, hit by poor earnings reports from retailers. The broader S&P 500 index was down 17 points, or 0.85%, at 2,046.61, whilst the Nasdaq composite slid 19 points to 4,717.68. Leading the decline were J.C.  Penney as the department store operator fell around 2.7% after reporting a drop in sales during the first quarter of the year and Nordstrom which also reported a drop in its first-quarter sales at established stores and slashed profit expectations for the year falling 13.42%. The DJIA closed below its previous monthly low, and the daily chart shows that it's at a brink of a bearish breakout, given that the benchmark is pressuring a strong support area around 17,450, whilst the technical indicators have resume their slides within negative territory, and the 20 SMA gains bearish strength above the current level. In the 4 hours chart, the technical indicators have posted modest bounces from oversold territory, but with the index near its lows and far below the moving averages, the risk remains towards the downside. 

Support levels: 17,450 17,396 17,330 

Resistance levels: 17,617 17,678 17,745

FTSE 100

The FTSE 100 closed at 6,138.50 on Friday, up by 34 points, but fell after the close in electronic trading, down for a third consecutive week, hit by Brexit fears after Mark Carney warned about the risk to growth and employment of such event. The index traded mostly in red for most of the day, but bounced back on the back of US strong retail sales figures and a late recovery in oil prices. Brent added roughly 4%, trimming early losses as US data eased worried over the global supply glut. Mining-related equities closed mixed, with Glencore down 1.42% and Anglo American up 0.57%, both roughly 17% lower over the past month. The daily chart shows that the index is struggling around its 100 DMA and near the multi-week low set at 6,056 last May 6th, whilst the technical indicators remain within bearish territory, but with limited downward strength. In the 4 hours chart, the index is well below its moving averages, whilst the technical indicators are also below their mid-lines, with no clear directional strength.

Support levels: 6,056 6,006 5,946

Resistance levels: 6,137 6,195 6,256 

DAX

European equities closed higher on Friday, with the German DAX adding 0.92% to end at 9,952.90, helped by strong earnings reports. Particularly in Germany, auto makers lead the way, with Volkswagen up 1.3% after reporting a rise in new car registration in April. BMW announced its global sales were up 1.9% year-on-year, bud ended down 2.6% by the close. The index gave back some of its gains after the close, tracking Wall Street's decline, and currently stands around 9,870, with the downward risk increasing, given that the benchmark continues to pressure its 100 DMA, a few points below the current level, whilst the latest daily recoveries stalled further below the 20 and 200 DMAs. Indicators in the daily chart hold below their mid-lines, but with limited downward strength at the time being. In the 4 hours chart, the bearish potential remains firm in place, with the index unable to recover above its 20 SMA, and the indicators also holding within negative territory, but lacking clear directional strength. 

Support levels: 9,829 9,755 9,680 

Resistance levels: 9,924 10,005 10,077 

Nikkei

Asian share markets were dominated by risk aversion, with the Nikkei plummeting  1.41% or 230 points to close at 16,412.21, as early profit taking ahead of US major releases, accelerated on the absence of fresh buying incentives and disappointing earnings reports. Export-oriented shares suffered the most, with Toyota down 1.78% after Wednesday's earnings report showed  a 2% year-over-year decrease in earnings per share and a year-over-year revenue decline of 4.4%. On Saturday, news hit the wires that Japanese Prime Minister Shinzo Abe has decided to delay the sales tax hike set for next April as it would threaten the nation’s efforts to beat prolonged deflation, which may push the yen lower and therefore favor a recovery in local shares. Technically, however, the benchmark is seen falling further, as in the daily chart it remains below its moving averages, whilst the technical indicators head south within bearish territory. Shorter term, and according to the 4 hours chart the bias is also towards the downside, as the index also trades below its moving averages, whilst the technical indicators head modestly lower below their mid-lines. 

Support levels: 16,305 16,224 16,135 

Resistance levels: 16,422 16,517 16,600 

Gold

Spot gold advanced on Friday amid sour market's sentiment, but closed the week in the red around $ 1,273.65 a troy ounce.  The commodity fell sharply intraday amid positive US data, but trimmed all of its daily losses during the US afternoon, as safe-haven assets gained on Wall Street's decline. Ever since flirting with the 1,300.00 region, the highest for the year, gold has been developing within a descendant channel, indicating the bullish trend that dominated it ever since the year started is beginning to fade. Still, a downward continuation is  out of the picture, at least until a break below a daily ascendant trend line coming from mid February, currently around 1,235.00. Daily basis, the price is struggling to hold above a mild bullish 20 SMA, whilst the technical indicators present a neutral stance within positive territory. In the 4 hours chart, the technical stance is also neutral as the technical indicators head nowhere around their mid-lines, although with the downside seen limited, given that the price is developing above all of its moving averages. 

Support levels: 1265.60 1,256.80 1,242.50 

Resistance levels: 1,279.05 1,287.50 1,295.50

WTI Crude Oil

Crude oil prices closed the week near its yearly highs, with WTI futures steady around $46.30 a barrel. The black gold saw a limited decline early Friday, but news suggesting US output continues to decrease as the Baker Hughes oil rig count fell to 318 against prior 328, fueled hopes the worldwide glut is closer to an end, helping it to recover ground. The report added to Thursday's International Energy Agency announce that said that during the second half of the year, global crude inventories will see a dramatic reduction on the back of strong demand. The daily chart, however, suggests that the rally may have reached an interim top, given that there's a clear double top under way, with its neckline at 43.00, meaning that a decline below this last can see the decline accelerating towards the 40.00 region. The technical indicators in the mentioned time frame head lower within positive territory, drawing some bearish divergence yet to be confirmed, although the 20 SMA keeps heading higher below the current level. In the 4 hours chart, the 20 SMA also heads sharply higher below the current level, whilst the RSI also advances around 62, maintaining the risk towards the downside, particularly if the immediate support around 45.60 holds on pullbacks. 

Support levels:  45.60 44.80 44.10 

Resistance levels: 46.75 47.60 48.20