Dollar's strength dominated the FX board this Tuesday

EUR/USD

Dollar's strength dominated the FX board this Tuesday, fueled by hints of loose economic policies in Australia and New Zealand, after both Central Banks came out with quite dovish announcements. The RBNZ adjustments to restrictions on high-leverage residential mortgage lending, while the RBA Minutes showed that policymakers are worried about growth, opening doors for further rate cuts in the nearest future. Further supporting the greenback was US housing data surpassing market's expectations. US housing starts rose 4.8% in June to a seasonally adjusted annual rate of 1.189 million, whilst building permits, a gauge of forthcoming construction, rose 1.5% to 1.153 million, slightly above the 1.150 million consensus. In Europe, on the other hand, the German ZEW survey showed that sentiment plummeted into negative territory, after local business assessed Brexit's consequences. For July, sentiment in Germany fell down to -6.8, while for the euro area, it fell down to -14.7. 

Having bounced from the mentioned low, the pair has broken below a daily ascendant trend line, coming from the post-Brexit low of 1.0910, and looks increasingly bearish, given that after bottoming around the 1.1000 level, it was unable to bounce strongly, ending the day below its latest comfort zone around 1.1050. Technically, the 4 hours chart shows that the price has accelerated below its 100 and 20 SMAs, with the shortest gaining downward strength. Indicators in the mentioned time frame have bounced modestly, but remain within negative territory, with the RSI hovering around 32. A break below the 1.1000 level could see the pair  retesting June's low, the mentioned 1.0910 level, en route to the 1.0800/40 region, a major support area. 

Support levels: 1.1000 1.0960 1.0910

Resistance levels: 1.1050 1.1080 1.1120 

USD/JPY

After extending its rally to a fresh 4-week high of 106.52, the USD/JPY pair turned south late in the US afternoon, to close the day in the red, a few pips below the 106.00 level. The early advance was fueled by positive housing data, but the poor performance of US stocks, pushed the pair back lower at the end of the day. Still holding within its latest range, the 1 hour chart for the pair shows that the price remains above a bullish 100 SMA, currently around 105.50 and offering an immediate short term support, while the Momentum indicator is bouncing modestly from its 100 line, and the RSI indicator heads lower around 46, favoring a limited slide ahead. In the 4 hours chart, the Momentum indicator keeps posting lower highs and has heads now lower right above its 100 level, while the RSI indicator is retreating from overbought levels, in line with the shorter term outlook. Still, the pair is not yet seen below the 104.70 level, generally expected to extend its consolidative stage until the BOJ's monetary policy meeting by the end of this month.

Support levels:  105.50 105.15 104.70 

Resistance levels: 106.35 106.80 107.15 

GBP/USD

The GBP/USD pair tumbled below the 1.3100 level, hitting a daily low of 1.3073 and holding nearby by US close. Data coming from the UK was positive, as inflation result marginally higher in June, although given that  data were collected before the Brexit referendum, it did little for the Pound. According to the official release, UK June inflation rose by 0.5% compared to a year before, and core inflation came in at 1.4%, beating estimates of 1.3%. The Producer Price Index also surpassed market's expectations, with output prices down by 0.4% yearly basis, against expectations of a 0.5% decline. Also hitting wires, were news that the new UK governing cabinet aims to trigger the art. 50 of the Lisbon treaty after this year's end, and would be interesting to see how the EU reacts to this. Trading below the 1.3100 level for the first time since July 12th, the pair is poised to extend its decline, back to the critical 1.3000 level. Technical readings in the 4 hours chart support the decline, as the price is now below its moving averages, while the RSI keeps heading north, despite being near oversold territory. 

Support levels: 1.3060 1.3025 1.2980

Resistance levels: 1.3130 1.3175 1.3220

AUD/USD

The AUD/USD pair tumbled after the RBA Minutes showed increasing concerns over local growth, paving the way for another rate cut, should upcoming inflation data result tepid. The pair fell down to 0.7475 before bouncing towards the current 0.7500 price zone, struggling to recover further. The pair gave back half of its post-Brexit losses, breaking also below the base of the daily ascendant channel that led such advance, indicating the decline may extend further in the short term. Still in the longer run, the rates' differential should support the Aussie. Technically, the 1 hour chart shows that the price is now below a strongly bearish 20 SMA, at 0.7510, while the technical indicators have recovered from oversold levels, but lost upward strength within bearish territory. In the 4 hours chart, the decline stalled around the 200 EMA, with short live slides below it having been quickly reverted. Still, the price is far below a bearish 20 SMA, while the technical indicators are correcting oversold readings, but hold far below their mid-lines, indicating the decline may extend at least down to 0.7450.

Support levels: 0.7450 0.7410 0.7370  

Resistance levels: 0.7520 0.7560 0.7600 

Dow Jones

After struggling all through the day around its daily opening, the DJIA managed to log its eighth straight record close, adding 0.14% or 26 points to end the day at 18,449.01. The Nasdaq Composite and the S&P, however, finished the day in the red, down 0.38% and 0.14% respectively. Stocks' rally was limited by Netflix disappointing quarterly results, reported after Monday's close, with the share plummeting 13% on Tuesday. Still, encouraging housing data in the US continued supporting the idea of solid growth in the country. In the daily chart the index maintains a bullish tone, as the Momentum indicator has turned flat within positive territory and after correcting extreme overbought readings, while the RSI indicator hovers around 70. In the 4 hours chart, the index presents a moderate upward potential, as the technical indicators head modestly higher within positive territory, while the benchmark holds above a flat 20 SMA.  

Support levels: 18,499 18,431 18,371

Resistance levels: 18,620 16,675 17,740

FTSE 100

The FTSE 100 closed the day practically unchanged at 6,697.37, up by 2 points or 0.03%, weighed by the negative tone of the mining-related sector. Glencore led the decline, down by 3.49%, followed by Rio Tinto that shed 3.47%, this last after reporting iron-ore shipments during the second quarter came in below estimates. Supermarket stocks also edged lower, with Tesco down 2% after the National Farmer Union present a complaint over its misleading farm brands. Holding within the higher end of its latest range, the daily chart for the Footsie suggests that the index may correct lower, as the Momentum indicator is retreating strongly from overbought levels, although a steeper decline is still unlikely, as the index holds above its moving averages, whilst the RSI indicator continues consolidating near overbought levels. In the 4 hours chart, the neutral stance seen on previous updates persists, with technical indicators hovering around their mid-lines and the index barely above a flat 20 SMA. 

Support levels: 6,668 6,615 6,561 

Resistance levels: 6,720 6,755 6,806

DAX

The German DAX ended the day in the red at 9,981.24, down by 81 points, but off its daily lows. European equities closed mostly lower, after the latest ZEW survey showed a sharp decline in business sentiment for July, a direct consequence of the UK's decision to leave the EU. Down for a second consecutive day, the daily chart for the index shows that it found some buying interest around a horizontal 100 DMA, around 9,915 having failed earlier this week to advance beyond the 200 DMA. Also, and in the mentioned time frame the Momentum and the RSI indicator have turned lower within positive territory, not enough to confirm further slide, but at least suggesting the upside will remain limited. In the 4 hours chart, the benchmark settled below a now flat 20 SMA, whilst the technical indicators entered negative territory, but lack downward strength at the time being, indicating an increasing downward potential, particularly on a break below the mentioned support at 9915. 

Support levels: 9,915 9,846 9,790

Resistance levels: 10,010 10,062 10,125

Nikkei

The Nikkei 225 extended its rally this Tuesday, adding 1.37% or 228 points to close at 16,723.31 to its previous week 9.2% gain. Despite most Asian share markets closed in the red, the Japanese benchmark advanced on the back of a weakening yen, and hopes of fresh stimulus coming as soon as next week. The index retreated some 100 points in after hours trading, as worldwide stocks struggled with a confidence setback, and is now poised to open around 16,600. In the daily chart, the index has managed to post a higher high and a higher low above a horizontal 100 DMA, while  the technical indicators have turned south from near overbought levels, suggesting it could correct lower on a break below 16,440, the mentioned 100 DMA. In the shorter term, the neutral stance seen on previous updates persists, with the index holding a few points above a flat 20 SMA, the Momentum indicator heading nowhere around its 100 level, and the RSI indicator consolidating around 62. 

Support levels: 16,560 16,480 16,432 

Resistance levels: 16,735 16,820 16,880

Gold

Gold prices remained confined to a tight range for a second consecutive day, with spot ending the day around $1,331.70 a troy ounce. The commodity held within Monday's range adding around $4.00 daily basis in spite of dollar's strength, amid diminishing confidence among investors. Gold has made no progress from a technical point of view, as in the daily chart, the metal is still consolidating slightly below the 23.6% retracement of its latest bullish run, and a horizontal 20 SMA, but with no actual downward strength. Technical indicators in the mentioned time frame  are turning modestly higher within neutral territory,  but it would take some serious advance above 1,333.50, the mentioned Fibonacci resistance, to favor a recovery. Shorter term, the 4 hours chart shows that price remains stuck around a horizontal 20 SMA, while the technical indicators are also aiming modestly higher around their mid-lines, not enough at this point to confirm a new leg higher. 

Support levels: 1,320.13 1,308.30 1,299.45 

Resistance levels: 1,333.50 1,343.40 1,351.80

WTI Crude Oil

Crude oil prices edged lower ahead of US crude stockpiles reports, weighed by a strong dollar and a global fuel glut. West Texas Intermediate crude oil futures settled at  $45.47 a barrel, although expectations of a large drawdown in US stocks last week, helped the market to limit losses. The commodity holds within the lower end of its latest range, and the daily chart shows that the price is barely holding above its 100 DMA, with selling interest surging on approaches to a bearish 20 DMA currently around 46.80. In the same chart, technical indicators point to further slides, heading south within negative territory, whilst in the shortest term, the bias is also towards the downside, as the price keeps developing below its 20 SMA, while the technical indicators hold below their mid-lines. A key support stands at 44.40, past Wednesday's low, with a break below it probably seeing the price testing the 42.50 a level, a major long term static support. 

Support levels: 45.10 44.40 43.70

Resistance levels: 46.20 46.90  47.50