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The EUR/USD pair closed in the red this Friday at 1.0560

11th January 2017

EUR/USD

The EUR/USD pair closed in the red this Friday at 1.0560, after another failure attempt to rally beyond the 1.0600 level. The common currency advanced up to 1.0626, its highest for this week during the past Asian session, but dollar's buyers came back with London,  and while the recovery was shallow, the dollar gained on the back of a modest advance in European and American equities. There were no macroeconomic releases in the EU, one of the reasons of the limited intraday range, while data coming from the US showed that the number of jobs´ openings was little changed in November at 5.522 million, against expectations of 5.555M and below previous 5.451M. The NFIB Business Optimism Index for November, jumped to 105.8 beating expectations and previous 98.4, the biggest confidence monthly rise since 1980 and the highest since the end of 2004. 

The pair fell down to 1.0550 and trades a few pips above it by the end of the US session, offering now a neutral stance in the 4 hours chart, as the price is stuck around the 23.6% retracement of its latest monthly slide and the 20 SMA, both around 1.0565, while technical indicators have turned modestly lower around their mid-lines, lacking directional momentum. A break below 1.0500 should see the pair resuming its decline, while only beyond 1.0650, December 29th high, the pair can gather some upward momentum and extend its upward corrective move up to 1.0710. 

Support levels: 1.0530 1.0490 1.0445 

Resistance levels: 1.0580 1.0620 1.0650 

USD/JPY

The USD/JPY pair maintains the bearish tone seen late last week, falling down to 115.19 this Tuesday, and unable to regain the 116.00 mark, in spite of marginally stronger dollar by the end of the day. Yields remained stable in the US, with the 10-year note benchmark at 2.38%, unchanged from its previous close. Japan will release its preliminary leading economic index and December's foreign reserves during the upcoming session, these lasts being more relevant given latest news coming from China. In the meantime, and from a technical point of view, the pair is biased lower in intraday charts, as in the 1 hour one, the price is developing below its 100 and 200 SMAs, with the shortest providing an immediate resistance at 116.25, and technical indicators having quickly resuming their declines after entering positive territory. In the 4 hours chart, the Momentum indicator heads south below its 100 level, the RSI consolidates around 43, while the price struggles around the 200 SMA, having pared early gains well below the 100 SMA. A break below 115.00 will expose the long term Fibonacci support at 114.00, and even though, the movement will remain corrective, as it will mean that the pair retraced half of its  latest gains. 

Support levels: 115.40 115.00 114.60 

Resistance levels: 116.10 116.60 117.00

GBP/USD

The GBP/USD pair extended its decline to 1.2106 this Tuesday, with no certain catalyst behind the move as the UK´s macroeconomic calendar remained empty. Still, persistent concerns over the upcoming Brexit keep denting investors' sentiment towards the Sterling. On Wednesday, the UK will release its November manufacturing and industrial production figures, which disappointed big in October. Good results from the mentioned reports will likely do little for the Pound, as the ongoing negative tone is based on political woes, although another round of negative readings will only fuel Pound's slide.  The UK will also release its latest trade data. The pair advanced up to 1.2189, but quickly retraced and in the 4 hours chart, the risk remains towards the downside, as the 20 SMA has accelerated its slide far above the current level, while the RSI indicator resumed its decline after a modest upward correction from oversold readings. The Momentum indicator in the mentioned chart also stands well below its mid-line, supporting the case of a new leg lower on a break below the 1.2080 region, a strong static support area. 

Support levels: 1.2130 1.2085 1.2050

Resistance levels: 1.2200 1.2240 1.2290

AUD/USD

The Australian dollar extended its latest rally against the greenback, posting a fresh 4-week high of 0.7384 before closing the day marginally higher some 20 pips below such high. The Aussie found support in mixed Chinese inflation figures, as  December's CPI eased to 2.1% from 2.3%, just above the 12-month average of 2.0%, although the core reading ticked higher. Producer prices, however, rose beyond expected, up by 5.5% against a media forecast of 4.5% and previous 3.3%. Base metals also underpinned the Australian currency, with  iron ore prices up 5.5% this Tuesday to their best level in nearly a month, and copper prices adding roughly 3%. The AUD/USD pair retreated after reaching a major resistance, the 61.8% retracement of the latest daily slide, with the following pullback meeting buying interest around the 50% retracement of the same decline, indicating that buying interest remains strong. In the 4 hours chart, the price held above a bullish 20 SMA, although the moving average has lost upward strength. The same happened with technical indicators that turned flat within positive territory, indicating the need of fresher highs to confirm a steeper advance beyond the 0.7400 level. 

Support: levels: 0.7340 0.7300 0.7270  

Resistance levels: 0.7390 0.7420 0.7450 

Dow Jones

US stocks closed mixed, with the Dow Jones Industrial Average turning lower in the last hour of trading, and closing at 19,855.53 down by 31 points. The S&P ended flat at 2,268.90, while the Nasdaq posted its third straight record close, up by 20 points to 5,551.82. Investors turned cautious ahead of a press conference by US President-elect, Donald Trump, scheduled for this Wednesday, moreover after the FED acknowledge the uncertainty related to his upcoming mandate. From a technical point of view, the daily chart for the Dow shows that the index opened and closed below its 20 DMA, while technical indicators continued grinding lower, the Momentum around its 100 level and the RSI at 57, not enough to confirm further slide. In the shorter term, and according to the 4 hours chart, the index remains below its 20 and 100 SMAs, both horizontal a few points above the current level, while technical indicators have gained bearish strength within negative territory, anticipating some further slides on a break below 19,837, the daily low and the immediate support. 

Support levels: 19,837 19,787 19,715    

Resistance levels:  19,920 19,985 20,045 

FTSE 100

Footsie's rally to record highs continued this Tuesday, with the benchmark up 37 points or 0.52% to close at 7,275.47, helped by Pound's continued weakness. It was the ninth consecutive record-high close and the 11th consecutive daily gain, the longest winning streak in almost eight years. Higher base metals' prices, also helped the index, with Anglo American nailing a 9.03% gain, followed by Rio Tinto that added 6.41% and Fresnillo which added 4.53%. In the daily chart, the rally is beginning to look overstretched, as the RSI indicator heads north around 77, although the Momentum indicator presents a moderate upward potential, pretty much flat within positive territory. In the 4 hours chart, a bullish 20 SMA, continues advancing below the current level, while the RSI pulled back modestly, but remains in overbought territory, at 73, while the Momentum indicator is also flat, due to the limited intraday range seen lately. The risk of a downward corrective has become high, yet as long as the Pound remains under pressure, declines will likely be limited. 

Support levels: 7,244 7,178 7,146 

Resistance levels: 7,286 7,330 7,365

DAX

European equities closed the day with modest gains, with the German DAX up 19 points or 0.17%, to 11,583.30, as market's mood improved following the release of Chinese inflation figures. Banks remained under pressure, with Deutsche Bank leading losers' list, down by 1.71% and Commerzbank down by 0.04%. Continental was the best performer, up by 2.74%.  Automakers and mining-related equities, on the other hand, rose, offsetting the negative tone in the banking sector. From a technical point of view, the daily chart for the DAX shows that the index remains above its 20 DMA, whilst the RSI indicator holds flat around 70 and the Momentum keeps grinding lower within positive territory, reflecting the ongoing consolidative stage rather than anticipating upcoming direction. In the 4 hours chart, the index is still neutral, with indicators heading nowhere around their mid-lines, and hovering around a flat 20 SMA. 

Support levels: 11,512 11,458 11,402

Resistance levels: 11,606 11,650 11,698

Nikkei

The Nikkei fell in its first day of active trading this week, down by 152 points or 0.79% to settle at 19,301.44, although the benchmark bounced some in after hours trading amid the positive tone of its overseas counterparts. A stronger yen maintained export-oriented equities under pressure, and despite Japanese consumer confidence increased to 43.1 from previous 40.9, the highest level in over 3 years. Sony was the best performer, up by 2.35%, followed by Tokyo Electron which added 1.60%. The index stands a few points above the mentioned close ahead of Wednesday's opening, with the balance leaned towards the downside in the daily chart, as its breaking below a now flat 20 SMA, whist technical indicators present modest bearish slopes within neutral territory. In the 4 hours chart, the bearish tone coming from technical readings is firmer, with indicators heading lower well below their mid-lines, and the index capped by its 100 SMA. 

Support levels: 19,257 19,164 19,110

Resistance levels: 19,394 19,447 19,500

Gold

Gold prices kept advancing this Tuesday, with spot reaching 1,190.50, its highest since November 30th, to settle at $1,186.70 a troy ounce by the end of the US afternoon. The soft tone of the US currency has kept the commodity underpinned ever since it bottomed near $1,100 a troy ounce last December, but even after rising to a fresh six weeks´ high, the movement is seen as corrective, and further gains are not yet clear, particularly if Trump delivers in its first days at the office. Uncertainty ahead of the policies the upcoming US president will apply, and how they would affect the world's largest economy, is the only reason of gold´s gains. From a technical point of view, the daily chart presents a clear upward potential, as indicators continue rallying within positive territory, whilst the 20 SMA is turning higher far below the current level. In the 4 hours chart, technical indicators have partially lost their bullish strength, but remain within positive territory, while buying interest is still surging on declines towards a bullish 20 SMA, currently at 1,179.50. 

Support levels: 1,179.50 1,173.10 1,165.20    

Resistance levels: 1,190.50 1,197.20 1,208.00

WTI Crude Oil

Crude oil prices broke lower, with West Texas Intermediate futures down 2% daily basis, to a fresh 1-month low of $50.78 a barrel, as a stronger dollar added to rising concerns over OPEC and non-OPEC compliance with the deal sealed last year to trim oil production. Monday's news reporting that Iraq will raise its crude export to all-time highs in February, overshadowed the positive developments in non-OPEC countries, as Russia and Kazakhstan announced they’ve met or exceeded their initial goals for trimming oil output. The price has clearly broken below the critical 52.00 level, and is poised to extend its decline according to the daily chart, as technical indicators have accelerated their declines within bearish territory, whilst the price is now well below its 20 DMA. In the same chart, the 100 DMA offers a strong dynamic support at 49.05, with a break below it exposing the commodity to a full retracement towards the base of its latest range at 45.00. In the 4 hours chart, technical indicators have turned flat within oversold territory, with no signs of changing bias, whilst the price is now below all of its moving averages, with the 20 SMA breaking below the 100 SMA, far above the current level, in line with the longer term perspective. 

Support levels: 50.80 50.30 49.50    

Resistance levels: 51.60 52.20 52.80

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.