Dollar's post-FOMC Minutes rally extended

EUR/USD

Dollar's post-FOMC Minutes rally extended during the first half of the day, and the EUR/USD pair fell down to 1.1179, its lowest since March 29th, before recovering some ground on the back of poor US macroeconomic data. Earlier in the day, the ECB released  the Minutes of its April meeting, which showed that the bank is strongly committed to revive inflation in the Eurozone, nothing that the market doesn't know already. In the US, weekly unemployment claims in the week ending May 13th came in at 278K above expected, but below previous of 294K. The Philadelphia manufacturing index fell in May, down to -1.8 from previous -1.6, also disappointing. Dudley and Lacker from the FED were on the wires, both somehow reaffirming that a rate hike next June is possible.

The pair maintains its negative tone ahead of Asian opening, having met selling interest on approaches to the 1.1240/50 region, now the immediate resistance, as long as the level holds, the pair has scope to extend its decline down to 1.1160 a strong static support level.  Technically, the 4 hours chart shows that the indicators have turned flat within oversold levels, whilst the 20 SMA maintains its bearish slope above the current level and further below the 100 and 200 SMAs, supporting the ongoing decline. A weekly close somewhere below 1.1120, should signal a continued decline towards the 1.1000 region for the upcoming week. 

Support levels: 1.1160 1.1120 1.1080

Resistance levels: 1.1245 1.1280 1.1330

USD/JPY

The Japanese yen shed some additional ground against the greenback during the past Asian session, as dollar's demand prevailed following the hawkish surprise provided by the latest FOMC Minutes. Additionally, BOJ's Kuroda stressed once again  that the Central Bank is ready to act if the currency's strength threatens the inflation goal.  Yen's weakness however, was limited by the sharp slide in worldwide stocks, on speculation US rates will go higher next June. The USD/JPY pair advanced up to 110.37, its highest since April 28th, but ended the day below the 110.00 figure. Despite the late retracement, the pair remains above 109.55, the 61.8% retracement of its latest bullish run, and therefore with chances of extending its gains up to 110.60. The short term picture, however, has turned bearish, as in the 1 hour chart, the technical indicators head modestly lower within negative territory. In this time frame, the 100 SMA heads  north around 109.30, indicating buyers outpace sellers. In the 4 hours chart, the price remains well above its moving averages that anyway maintain bearish slopes, whilst the technical indicators extended its decline, but remain within bullish territory.

Support levels: 109.55 109.10 108.70 

Resistance levels: 110.10 110.60 111.00

GBP/USD

The GBP/USD pair surged to a fresh 2-week high of 1.4663, with the Pound outperforming on the back of diminishing fears over a Brexit, and a surprise rebound in spending during April, as Retail Sales in the UK, came in much better-than-expected, up by 1.3% monthly basis and by 4.3% from a year before. The pair retraced to 1.4560 intraday, but buyers are firmly defending the upside around it, and given that the pair recovered from around the 61.8% retracement of its latest daily bullish run, the advance has scope now to extend up to 1.4770, this May high. Technical readings in the 4 hours chart support the bullish bias, as they have recovered they upward slopes after correcting overbought conditions, whilst the 20 SMA has extended its advance well above the current level. The line in the sand to buy on dips is 1.4525, the 38.2% retracement of the same rally. 

Support levels: 1.4560 1.4525 1.4480 

Resistance levels: 1.4660 1.4700 1.4735

AUD/USD

The AUD/USD pair fell to a fresh 2-month low of 0.7175, but trimmed most of its daily losses by the end of the day and recovered the 0.7200 level, as stocks and commodities pared early losses and corrected higher. Earlier in the day, Australian employment data came in mixed, not enough to put the RBA under pressure. The country created 10,800 new jobs against 12,000 expected, while the unemployment rate held at 5.7% against a 5.8% forecast. The pair is ending the day above 0.7210, the 61.8% retracement of this year's rally, but the risk remains towards a downward continuation, as there are no technical signs suggesting a stronger recovery. Short term, and according to the 1 hour chart, the pair can advance further during the next few hours, as the price overcame its 20 SMA, now flat around 0.7205, whilst the technical indicators head higher above their mid-lines. Nevertheless, and in the 4 hours chart, technical indicators have barely corrected oversold readings, whilst the price is still well below a bearish 20 SMA, suggesting that any upward move will likely be short-lived.

Support levels: 0.7210 0.7170 0.7130 

Resistance levels: 0.7250 0.7290 0.7330

Dow Jones

Wall Street edged lower, with investors worried about the possibility of a soon-to-come rate hike. The DJIA fell 91 points, and closed at 17,435.40, the Nasdaq shed 26 points to end at 4,712.53, while the S&P ended up 2,040.04, down by 0.37%. The Dow fell to its lowest since mid March, ending the day, however, far from its daily low of 17,325.  Technically, the Dow Jones is poised to extend its decline, as in the daily chart, the index keeps posting lower lows and lower highs below a bearish 20 SMA, whilst the technical indicators head lower after failing to overcome their mid-lines. In the 4 hours chart, the 20 SMA has widen the distance with the 100 SMA, heading sharply lower and acting as a strong dynamic resistance around 17,548, while the technical indicators have bounced from oversold territory, but mostly tracking the late recovery in the benchmark than suggesting that the advance can extend this Friday. 

Support levels: 17,398 17,325 17,248

Resistance levels: 17,460 17,530 17,607

FTSE 100

The FTSE 100 fell by to an over two and a half months, closing 110 points lower at 6,053.35, hit by prospects of a US rate hike next June. Mining-related companies suffered the most, as metals plummeted on the back of a strong dollar, with Fresnillo leading decliners, down by 7%, and followed by Anglo American that closed 4.42% lower. Also news that an EgyptAir plane fell over the Mediterranean affected airlines and travel operators, with the sector closing in the red. The index managed to recover some ground in after-hours trading, but technically, and according to the daily chart, the downward potential  has increased, given that the technical indicators maintain their bearish slopes within negative territory, whilst the 20 SMA turned south well above the current level. In the shorter term, the risk is also towards the downside, as the index is now far below all of its moving averages, whilst the Momentum indicator keeps heading lower and the RSI indicator hovers around 41. 

Support levels: 6,044  6,006 5,964

Resistance levels: 6,121 6,178 6,225 

DAX

European stocks closed sharply lower this Thursday, weighed by speculation over FED's upcoming rate hike next June. The German DAX tumbled 145 points or 1.48% to end at 9.795.89. Bayer AG led the decline, down 8.2% after making an unsolicited takeover offer for Monsanto in a deal that could create the world's biggest supplier of seeds and pesticides. The index stands at the lower end of this week's range, but off its daily low, and in fact trading some points above the mentioned close. The technical bias however, maintains the risk towards the downside, as in the daily chart, it keeps pressuring a bearish 100 DMA whilst the 20 SMA gains bearish slope far above the current level, and the indicators hold within bearish territory. Shorter term, the 4 hours chart also favors the downside, as the index met intraday selling interest on advances to its 20 SMA, currently around 9,880,  while the Momentum indicator retreats from its mid-line and the RSI indicator consolidates around 44, lacking clear directional strength at the time being.

Support levels: 9,752 9,680  9,617

Resistance levels: 9,880 9,962 10,048

Nikkei

The Japanese Nikkei closed the day flat, up by 2 points or 0.01% at 16,646.66, with yen's weakness preventing the index from falling further. Capping the upside on the other hand, was positive data released right before the opening bell, as seasonally adjusted core machinery orders in March, rose 5.5% from the previous month, beating expectations of a 0.3% rise. Positive macroeconomic figures in Japan diminish chances of a soon to come extension of stimulus from the BOJ next June. The index fell in after hours trading, and is now poised to open around 16,560. The benchmark continues trading within a well-limited range, contained by selling interest around the 100 DMA, and with technical readings in the daily chart having lost their upward strength within positive territory, something that should keep the upside limited. In the 4 hours chart, the technical stance is neutral, with the index trapped within its moving averages, and the indicators heading nowhere around their mid-lines. 

Support levels: 16,504 16,447 16,356

Resistance levels: 16,665 16,751 16,820 

Gold

Spot gold sunk to $1,243.76 in the zenith of dollar's momentum, this Thursday, but bounced back in the US session, to end the day around $1,254.50 a troy ounce.  After the US Central Bank released the minutes of its latest meeting, chances of a rate hike in June have become more likely, as the commodity has been for over a year now,  quite responsive to changes in FED's  interest-rate hike probabilities. Bulls are not out of the equation yet, given that gold bounced from the base of the descendant channel that has been leading price action ever since it topped around 1,303.00, but the upward momentum keeps fading. From a technical point of view, the daily chart shows that the price has extended further below its 20 SMA, while the technical indicators keep heading south below their mid-lines. In the 4 hours chart, the technical indicators are bouncing from oversold territory, but remain well below their mid-lines, far from suggesting a stronger recovery. A daily ascendant trend line coming from February 10th daily low comes this Friday around 1,235.00, being the line in the sand for bulls, as a break below it should imply a downward continuation for the upcoming sessions. 

Support levels: 1,243.80 1,235.00 1,223.90

Resistance levels: 1,258.90 1,265.40 1,274.40 

WTI Crude Oil

Crude oil prices plummeted at the beginning of the day, with WTI crude oil prices falling intraday down to $46.72 a barrel, its lowest in three days, before up roaring to 48.21, holding nearby at the end of the day. The commodity fell roughly 3% intraday on the back of dollar's strength, but cut losses on news that the Nigerian Qua Iboe crude oil terminal was reported closed due to militants' threats.  Buying on dips coming from speculative interest seems to have also boosted the recovery. Anyway, the commodity is poised to extend its rally, as in the daily chart, the price is well above a  firmly bullish 20 SMA, whilst the Momentum indicator extends its advance above the 100 level, and the RSI consolidates near overbought readings. In the shorter term, the 4 hours chart shows that the latest recovery has sent the price back above its 20 SMA, whilst the technical indicators turned sharply higher and crossed their mid-lines into positive territory, supporting further gains on a break above 48.60, the immediate resistance.

Support levels: 47.50 46.70 46.20

Resistance levels: 48.60 49.20 50.00