The dollar closed the day broadly higher against most of its major rivals

EUR/USD

The dollar closed the day broadly higher against most of its major rivals, with the exception of the Japanese yen, on renewed hopes of a US rate hike next December.   Greenback's momentum was likely exacerbated by  Pound's weakness that traded against it as low as 1.2088. As for the EUR/USD, the pair broke through the base of its latest range, falling down to 1.1048, its lowest in more than two-months. 

Early Europe,  Germany released the October ZEW survey, which showed that sentiment improved among local business, up to 6.2 from previous 0.5. For the EU, economic sentiment improved from 5.4 to 12.3. In the US, the NFIB Business Optimism Index for September, fell to 94.1 from previous 94.4.  while the  Labor Market Conditions Index recorded a decline of 2.2 for September following an upwardly revised 1.3 decline the previous month. The index has fallen in seven of the last eight months, not enough to imply labor market's weakness, but indeed something to take notice.

From a technical point of view, the pair has broken below a critical support, a daily ascendant trend line coming from 1.0505 the low achieved last December 3rd, accelerating its slide afterwards, and therefore with high bearish implications. The downward momentum persists ahead of Wall Street's close, according to the 4 hours chart, while the 20 SMA has accelerated its decline, but stands now  around 1.1140,  too far to become relevant as resistance. The RSI indicator in the mentioned time frame has turned flat around 25, suggesting that the market is making a pause. Still, a bearish acceleration through the mentioned daily low, will put the pair in position to challenge the 1.1000 figure. 

Support levels: 1.1045 1.1000 1.0960    

Resistance levels: 1.1120 1.1160 1.1205 

USD/JPY

The USD/JPY pair surged up to 104.06 at the beginning of the day, led by dollar's broad strength, but the pair changed course in the US session, weighed by poor US data and the sharp decline in US stocks. Minor employment and business optimism data released in the US, fell short of expectations, kick starting the downward move in the pair. Technically, the pair remains above its daily 100 DMA, at 102.60, sort of a line in the sand for the latest bullish movement, meaning that it will take a break below it to see the pair returning to the 100.00 region. At this point, the pair needs to settle firmly beyond the 114.00 level to be able to extend its advance up to 106.60, a major long term Fibonacci resistance. For the short term, the 1 hour chart  suggests that the pair may continue falling, as the price is back below its 100 SMA, while technical indicators have bounced modestly from near oversold readings, but remain far below their mid-lines. In the 4 hours chart, the Momentum indicator heads north around its 100 level, while the RSI indicator heads south around 52, diverging from each other, and indicating is no time to sell yet. 

Support levels: 103.15 102.90 102.60

Resistance levels: 103.80 104.15 104.50

GBP/USD

The British Pound tumbled against its American rival, printing a daily low of 1.2088, before settling around 1.2130 by the end of the day. Down for a fourth consecutive day, the GBP/USD pair keeps falling on fears about the consequences of a "hard Brexit." Brexit woes this Tuesday gyrated around a potentially  constitutional  matter, as the Parliament might challenge PM May right to start the process of withdrawing  the UK from the EU without a vote of the Houses. Speculative interest is now eyeing a possible retest of Friday's wild swings' low that varies among retail brokers between 1.16 and 1.19, but implies anyway a bearish extension below the 1.2000 figure. From a technical point of view, the 4 hours chart shows that  technical indicators maintain their sharp bearish slopes, despite being in extreme oversold territory, while the 20 SMA continues playing catch-up, accelerating lower far above the current level, and around 1.2380. Upward corrective moves will likely be seen now as selling opportunities, with the first line of sellers around 1.2225, the low set at the mentioned crazy slump.

Support levels: 1.2080 1.2035 1.1990 

Resistance levels: 1.2150 1.2190 1.2225

AUD/USD

The AUD/USD pair fell to a fresh 3-week low of 0.7533 this Tuesday, dominated by dollar's demand ever since the day started. Prospects of a US December rate hike, alongside with a poor performance in base metals, weighed on the Aussie, which was unable to hold above the 0.7600 figure after briefly advancing above it earlier this week. Now consolidating near the mentioned daily low, the 1 hour chart shows that the 20 SMA is heading sharply lower, capping the upside around 0.7550, while the Momentum indicator has resumed its decline from near its mid-line, after correcting oversold conditions reached earlier this week. In the same chart, the RSI indicator  consolidates around 40, all of which maintains the risk towards the downside, despite the current lack of directional strength. In the 4 hours chart, the 20 SMA has extended below the 200 EMA, with the shortest accelerating its slide, while technical indicators head modestly lower within negative territory. Should the price extend below 0.7520, now the immediate support, seems likely a test of the major support at 0.7450, the 38.2% retracement of this year early rally. 

Support levels: 0.7520 0.7490 0.7450    

Resistance levels: 0.7550 0.7595 0.7630

Dow Jones

Despite the generally positive tone of Asian and European equities, US indexes opened sharply lower, with the DJIA losing over 120 points in the first hour or trading, and ending the day at 18,128.66, down by 1.09%. The Nasdaq Composite shed 1.54%, to close at 5,246.79, while the S&P lost 1.24%, to 2,136.73. Stocks were weighed by a slide of roughly 1% in oil prices, and a stronger dollar. Adding  to the negative momentum among equities, was Alcoa´s earnings report, as the company said revenue fell at its fastest-growing segment during the third quarter.  The DJIA fell down to a critical support area, printing 18,053 before recovering ground, but the risk is now towards the downside as the index broke well below its 20 and 100 DMAs, while technical indicators turned lower, still stuck in neutral territory. In the 4 hours chart, the index has accelerated its slide after breaking below its moving averages that anyway lack directional strength, while technical indicators have lost downward momentum, but hold within bearish territory, suggesting a limited upward potential for this Wednesday. 

Support levels: 18,109 18,053 17,990

Resistance levels: 18,200 18,268 18,325

FTSE 100

The FTSE 100 advanced intraday up to fresh record highs of 7,129.83, but lost momentum in London's afternoon to end the day 0.38% lower at 7,070.88. The sharp early advance was attributed to Pound's continued weakness, while a decline in commodities´ prices ended up pushing the benchmark lower. Among the worst performers were Glencore that lost 2.68%, Fresnillo that closed 2.26%, and BHP Billiton, down by 2.21%. The daily chart for the Footsie presents a doji, with the index some points above the mentioned close, despite the poor performance of Wall Street. In the same chart, the 20 SMA maintains a sharp bullish slope below the current level, whilst technical indicators retreat from overbought readings, but remain well above their mid-lines, maintaining the risk towards the upside. In the 4 hours chart, the index bounced from a horizontal 20 SMA, while technical indicators turned higher after correcting down to their mid-lines, also suggesting that buying interest is still quite strong. 

Support levels: 7,060 7,005 6,948

Resistance levels: 7,129 7,170 7,210

DAX

European equities edged lower this Tuesday, with the German DAX ending the day at 10,577.16, down by 46 points. Mining stocks led the decline in the region, followed by aerospace firms that also shed ground. A better-than-expected German ZEW survey failed to attract investors, although the release gave a temporal boost to the benchmark that traded as high as 10,690 before changing course. Infineon Technologies was the biggest loser, down by 2.41%, whilst Deutsche Bank shed 1.27%. The daily chart for the index shows a fading upward momentum, as indicators turned lower within positive territory, but near their mid-lines, although the price is still above its moving averages, with the 20 DMA providing a first relevant support around 10,478. In the shorter term, and according to the 4 hours chart, the price is now hovering around its 20 SMA, while technical indicators hover around their mid-lines, showing a limited upward potential at the time being. 

Support levels: 10,542 10,482 10,448

Resistance levels: 10,585 10,647 10,705 

Nikkei

The Nikkei 225 surged 0.98% or 164 this Tuesday to close the day at 17.024.76, helped by the rally in oil prices and a weaker yen. The benchmark surged above 17,000 for a first time in over a month, but turned south in after-hours trading, following the lead of Wall Street, which closed sharply lower. The index stands around 16,867 ahead of Wednesday's opening,  and back in the red weekly basis. Yen's renewed strength has been limited so far, yet given that the currency is poised to appreciate further, the index may extend its decline during the upcoming hours. From a technical point of view, the daily chart shows that, despite closing in the red, the index managed to post a higher high and a higher low, while holding above all of its moving averages, all of which limits the risk of a sharp decline. Technical indicators in the mentioned time frame, however, turned south, moving towards their mid-lines in positive territory. In the 4 hours chart,  the benchmark is developing below a horizontal 20 SMA, currently at 16,892, the immediate resistance, while technical indicators turned modestly higher around their mid-lines, also limiting the downside. 

Support levels: 16,842 18,767 16,710

Resistance levels: 16,892 16,942 16,987 

Gold

Spot gold erased its Monday's gains and settled at $1,255.00 a troy ounce by Wall Street's close, undermined by dollar's strength and increasing expectations for a US FED rate hike next December. Hopes arose after FED'S Chicago President, Charles Evans said that the economy is doing more than well, and that a hike before year end "could be fine." The daily chart shows that the price settled around Friday's close, with the price still moving away from its moving averages, whilst technical indicators have extended their declines within oversold territory, all of which maintains the risk towards the downside. In the 4 hours chart,  the price has been consolidating below a now horizontal 20 SMA,, while the Momentum indicator continues lacking directional strength within neutral readings, although the RSI resumed its decline, approaching oversold readings and in line with further slides. The immediate support is the 1,249.50 region, the level to break to confirm a new leg lower for this Wednesday. 

Support levels: 1,249.50 1,241.35 1,234.70

Resistance levels: 1,257.30 1,266.30 1,277.50 

WTI Crude Oil

Crude oil prices retreated from the multi-month highs posted this Monday, in spite of positive news coming from the International Energy Agency, as the organism said that oil  market may rebalance much faster if the OPEC and Russia agree to reduce production, although the agency also said that is unclear  how long it would take. West Texas Intermediate crude futures traded as low as $50.38, but settled a few cents below 51.00, indicating some profit taking, probably triggered by dollar's strength, rather than suggesting that the bullish move has reached a top. From a technical point of view, the daily chart shows that the technical indicators have retreated from near overbought readings, but remain above previous weekly lows, whilst the 20 SMA keeps heading north below the current level, all of which limits chances of a steeper decline. In the 4 hours chart, the commodity has met buying interest around its 20 SMA, while technical indicators have turned higher from their mid-lines, also indicating that buying interest outpaces selling one. 

Support levels: 50.30 49.40 48.70

Resistance levels: 51.60 52.20 53.00