The dollar remained weak across the FX board

EUR/USD

The dollar remained weak across the FX board, although it managed to regain some ground this Wednesday, helped by profit taking ahead of the upcoming ECB economic policy meeting, although with FOMC action being now less likely, the risk for the American currency remains towards the downside.  The EUR was also weighed by poor data coming from Germany, as the largest EU economy has been showing signs of economic weakness at the beginning of the third quarter, and this latest report confirms the slowdown in the industrial sector, as output during July fell by a seasonally adjusted 1.5% during July, when compared to the previous month. Majors, however, remain within their recent highs against the greenback, on diminishing hopes of  a US FED September rate hike.

Early Thursday the ECB is having an economic policy meeting, although the European Central Bank is expected to remain on hold. An increase in the amount of bond-buying seems unlikely, given that falling yields in the region are shrinking the range of eligible assets. The most the ECB can do is announce an extension of the QE program beyond the March 2017 current limit, but seems unlikely that could be enough to fuel local growth and inflation. Generally speaking, Draghi is expected to offer a dovish, cautious speech that may result in some temporal weakness of the common currency.

The pair retains a positive tone according to intraday readings, as in the 4 hours chart, the price is moving around a horizontal 100 SMA, but above a now bullish 20 SMA. In the same time frame, technical indicators have corrected overbought conditions, but settled well above their mid-lines, as investors entered wait-and-see mode. The same chart shows that the price extended up to 1.1271 during the past American session, retreating from the 61.8% retracement of its latest daily decline, and the level to surpass to see further gains this Thursday. Should the market prefer the greenback, the key support is now former intraday highs around 1.1210, as a move below it would result in a return to the 1.1160 region. 

Support levels: 1.1210 1. 1.1160 1.1120

Resistance levels: 1.1275 1.1310 1.1365 

USD/JPY

The USD/JPY pair fell down to 101.20, on the back of fading expectations of a rate hike in the US after the release of the ISM non-manufacturing index last Tuesday, which added up to the dismal Nonfarm Payroll report released last Friday. The yen was further supported by speculation that the BOJ will remain on-hold this month, in the wake of the split stance of Japanese policy makers. The USD/JPY pair, however, recovered partially from the mentioned low, but the upward potential remains limited in the short term, as in the 1 hour chart, technical indicators have lost their upward strength after entering in positive territory, while the price is far below its moving averages, with the 100 SMA accelerating above the 200 SMA, both in the 102.70/90 region. In the 4 hours chart, the price is a few pips above a bullish 100 SMA, while indicators recovered from oversold territory, but remain well below their mid-lines. 

Support levels: 101.20 100.65 100.20  

Resistance levels: 102.05 102.50 102.90

GBP/USD

The British Pound erased most of its weekly gains against the greenback, weighed by dismal UK data and comments from BOE's Governor Carney, at a parliamentary hearing. Industrial Production in the kingdom advanced by 0.1% during July, while Manufacturing Production fell by 0.9% in the same month. As for Governor Carney, he was questioned by lawmakers about making  the decision to provide more stimulus right after the Brexit referendum, given that  the economy has been quite resilient to the news, but he said he is quite comfortable with such decision, and that it was that decision which avoided a deeper economic chaos. The GBP/USD pair fell down to 1.3318 during the American session, meeting some short term buying interest around the key Fibonacci support, but looking increasingly bearish in the 4 hours chart, as the bounce has been shallow, while the price remains below its 20 SMA. In the same chart, technical indicators present sharp bearish slopes and are about to cross their mid-lines towards the downside. A downward extension beyond 1.3320, should favor further slides for this Thursday, with scope to return to the 1.3250 region, where the next batch of buying is waiting. 

Support levels: 1.3320 1.3285 1.3250  

Resistance levels: 1.3275 1.3310 1.3360 

AUD/USD

The AUD/USD pair rallied up to 0.7697, its  highest since mid-August, but closed the day a handful of pips below its opening, down after a five-day winning streak. Australia released its Q2 GDP figures during the past Asian session, showing that the local economy grew by 0.5% in the three months to June, slightly below market's forecast for a 0.6% gain. Year-on-year  GDP came in at 3.3%, beating expectations of a 3.2% advance. The 1 hour chart for the pair presents now a neutral stance, with the price holding a few pips below a horizontal 20 SMA, and technical indicators heading nowhere around their mid-lines. In the 4 hours chart, however, the risk remains towards the upside, as the 20 SMA continued heading sharply higher below the current level, whilst technical indicators have recovered modestly within overbought territory, following a modest downward correction. At this point, the pair needs to settle above the 0.7700 figure to be able to extend its gains, with scope then to retest the year high around 0.7830. 

Support levels: 0.0.7645 0.7600 0.7570 

Resistance levels: 0.7695 0.7730 0.7770

Dow Jones

US indexes closed mixed, and not far from their daily openings, with investors unmotivated due to the lack of relevant US data and ahead of the upcoming ECB  economic policy  meeting. FED's Beige Book released late in the US afternoon, reported that the US economy grew at a modest pace in the last two months, with the focus still in weak inflation. The Dow Jones Industrial Average lost 12 points to close at 18,526.14, while the S&P ended at 2,186.15, down 0.02%. The Nasdaq Composite advanced further adding 8 points, to close at fresh record highs of 5,283.93. The Dow's technical outlook is still neutral according to the daily chart, as the price is stuck around a horizontal 20 DMA that also converges with the 38.2% retracement of the latest bullish run, while indicators continue lacking directional strength within their mid-lines. In the 4 hours chart, the index is right above a congestion of moving averages, a clear indication of the ongoing absence of directional strength, whilst indicators head modestly higher within neutral territory. 

Support levels: 18,508 18,462 18,410

Resistance levels: 18,538 18,580 18,638 

FTSE 100

After a sour start, the FTSE 100 closed the day 20 points higher at 6,846.58. The London benchmark. Home builders  weighed on the benchmark, with Berkeley Group Holding shedding 3.05% and Barrat Developments down by 2.92%, on uncertainty over the future of the sector after the Brexit. A tepid output report also weighed on the index,  as industrial and manufacturing production came out mixed for July, but overall showing limited growth during the month. Technically, the daily chart shows that the index remained capped below its 20 SMA, while indicators hold flat slightly below their mid-lines, suggesting the upward potential is limited. In the 4 hours chart, the benchmark hovers around its 20 and 100 SMAs, both converging around 6,840, while the Momentum indicator heads lower below the 100 level and the RSI indicator remains flat around 50, failing to suggest a certain directional strength. 

Support levels: 6,817 6,754 6,712

Resistance levels: 6,868 6,931 6,968 

DAX

European equities recovered some ground as the ECB's economic decision looms, as the Central Bank is mostly expected to leave its economic policy unchanged, but also to extend its easing program for at least six months. The German DAX added 65 points to close the day at 10,752.98, with most equities closing higher. Banks recovered ground with Commerzbank up by 1.24%, while export-oriented equities gained the most with steelmaker ThyssenKrupp up 1.7% and chemical BASF adding 1.51%. The DAX is now flat yearly basis, trading around December close, and with the daily chart maintaining a modest bullish tone given that the index is still developing firmly above a flat 20 DMA while indicators turned modestly higher above their mid-lines, lacking upward strength. In the shorter term, and according to the 4 hours chart, a bullish 20 SMA attracted buying interest on dips, while indicators present divergent stances within positive territory, not enough to confirm further gains for this Thursday. 

Support levels: 10,708 10,675 10,626 

Resistance levels: 10,769 10,807 10,854

Nikkei

The Nikkei 225 edged lower this Wednesday, shedding 69 points or 0.41% to close the day 17,012.44. A stronger yen weighed on the benchmark that broke below the key 17,000 mark in after hours trading, tracking Wall Street's decline. Among Japanese shares, export-oriented ones led the decline, with automakers Toyota and Nissan closing roughly 1% lower. The daily chart for the index shows that it's still holding a few points above its 200 DMA, while the 20 DMA advances below the largest. Indicators in the mentioned time frame hold flat within positive territory, suggesting the downside is still limited, something that won't persist if the USD/JPY loses the 101.00 level. In the shorter term, the 4 hours chart presents a moderate bearish tone, as indicators hold within negative territory, while the benchmark is below a now horizontal 20 SMA around 16,996, now the immediate resistance. 

Support levels: 16,915 16,860 16,792

Resistance levels: 16,996  17,083 17,153 

Gold

Profit taking hit gold prices, down on Wednesday after hitting a three week high following worse-than-expected US data. Spot gold ended the day around $1,344.70, further weighed from some hawkish rhetoric from FED' officers, as following Williams´ comments on Tuesday, favoring a sooner rate hike, it was the turn of Esther George to say that is time to increase interest rates. Spot's daily chart shows that the metal lost upward momentum, but the upside is still favored, given that in the daily chart, it holds well above the 1330/5 static support region, while also above a horizontal 20 SMA in the same price zone. Technical indicators in the mentioned time frame have lost upward strength, but remain within bullish territory. In the 4 hours chart, indicators erased overbought conditions, but hold well above their mid-lines, while the 20 SMA heads strongly higher below the current level, having already surpassed the 100 SMA, indicating that buying interest is still high. 

Support levels: 1,342.50 1,334.00 1,324.80 

Resistance levels: 1,353.50 1,364.30 1,375.11 

WTI Crude Oil

Crude oil prices traded higher this Wednesday, supported by a strong demand of gasoline, this last underpinned by expectations that refineries are slowing down. Ahead of US inventory data,  West Texas Intermediate crude oil futures settled around $45.50 a barrel, and the daily chart shows that the price is pressuring the 38.2% retracement of its latest bullish run, still unable to advance beyond it. In the same chart, the price remains below its 20 and 100 SMAs, both around 47.20, while indicators head north within negative territory, with limited upward strength. In the 4 hours chart, the commodity presents a modest upward potential, as the price is within horizontals 100 and 200 SMAs, while technical indicators have stabilized lack directional strength around their mid-lines. Uncertainty over when, and if the oil market will rebalance itself, will probably maintain price within the 40/50 range. Shorter term, upcoming direction will be correlated with the upcoming API and EIA weekly reports.  

Support levels: 45.00 44.30 43.70 

Resistance levels: 45.65 46.50 47.20