The EUR/USD pair closed the week at 1.0973

EUR/USD

The EUR/USD pair closed the week at 1.0973, closing below the 1.1000 level for the first time since early March. The imbalance between macroeconomic  data between Europe and the US, alongside with decreasing hopes of massive stimulus coming from different Central Banks have put the greenback in the bullish path, as speculators are now seeing more chances of a US rate hike this year. 

European data was generally positive, with advanced EU PMIs for July stronger-than-expected, with even French manufacturing up, from 48.3 to 48.6, although still within contraction territory. In Germany, the manufacturing PMI slipped from 54.5 to 53.7 and the services PMI rose from 53.7 to 54.6, while for the whole region, manufacturing printed 51.9, below market's expectations and the services PMI came in at 52.7.  US preliminary July manufacturing PMI came in at 52.9, much better than the previous 51.3 or the 51.6 expected. 

As for the technical picture of the pair, the daily chart shows that it has been unable to recover above a bearish 20 SMA that maintains a strong bearish slope, currently in the 1.1060 region, after crossing below the 100 and 200 SMAs, in line with further slides. Also,  technical indicators in the mentioned time frame have turned lower within negative territory, with the RSI indicator at fresh July lows. In the 4 hours chart, the pair is also below its moving averages that maintain bearish slopes, but the technical indicators hold flat within bearish levels, rather reflecting the lack of directional momentum than suggesting downward exhaustion. The pair has a strong support at 1.0910, the post-Brexit low, with a break below it opening doors for a steeper decline down to the 1.0800/40 region, a major long term support area. 

Support levels:  1.0955 1.0910 1.0840

Resistance levels: 1.1020 1.1060 1.1100 

USD/JPY

After topping at 107.48, the USD/JPY pair closed the week with modest gains at 106.13, as investors rushed to take profits out ahead of the upcoming BOJ's meeting, next July 29th. Abe's victory in the latest elections fueled speculation that the Japanese Government was getting ready to launch massive stimulus, both fiscal and monetary, resulting in the JPY plummeting against all of its major rivals. But BOJ's Governor Haruhiko Kuroda denied the possibility of implementing "helicopter money," even despite reaffirming that the central bank is prepared to step up stimulus if needed. Market is expecting the BOJ to cut rates further into negative territory, down to -0.2% from current -0.1% this week. The pair closed the week off its high, but according to the daily chart, the bullish tone persists, as the Momentum indicator keeps heading north in overbought  territory, while the RSI turned higher after a limited downward correction within positive territory. Still, the 100 SMA in the mentioned time frame stands at the mentioned high, becoming a critical breakout point to confirm a new leg higher this week. In the 4 hours chart, the pair has lost its bullish tone, as despite the price is firmly above its 100 and 200 SMAs, the technical indicators have turned lower within negative territory, suggesting the pair may extend further its decline, particularly on a break below 105.40. 

Support levels:  105.80 105.40 105.05 

Resistance levels: 106.60 107.10 107.50

GBP/USD

The GBP/USD pair closed the week in the red around the 1.3100 level, weighed last Friday by preliminary PMIs readings, showing that the UK plummeted into contraction zone. Markit published one-off flash PMIs for the kingdom, with data collected after the referendum,  which came in worse-than-expected, even despite forecasts were already meaningfully negative. The services number result at 47.4 from previous 52.3, while the manufacturing sector fell down to 49.1 from previous 52.1, indicating the UK is now in contraction territory, as a result of the uncertainty surrounding the decision of leaving the EU. The daily chart shows that the price was contained by the 23.6% retracement of its latest daily decline at 1.3320, and that the pair closed below its 20 SMA, while the Momentum indicator holds flat within positive territory, but that the RSI indicator heads lower around 40, all of which indicates that the risk remains towards the downside. However, it also seems that the pair has found a comfort zone around the 1.3000 figure, and that a break below the key psychological level would take a huge catalyst. Shorter term, and according to the 4 hours chart, the pair presents a neutral-to-bearish stance, as the price is below a flat 20 SMA, while the technical indicators lack directional strength, but hold within negative territory.

Support levels: 1.3065 1.3020 1.2980

Resistance levels: 1.3130 1.3165 1.3200

AUD/USD

The AUD/USD pair closed last week at 0.7465 after posting a fresh 2-week low of 0.7442 in the American afternoon, ahead of the release of Australian second quarter CPI next Wednesday. Speculation that the RBA may provide another rate cut in August, if underlying inflation continues to fall should keep the Aussie in the negative side. Year-on-year trimmed inflation for the second quarter is expected to have fallen to 1.5% from previous 1.7%. A reading below expected should support the bearish case for the pair. Technically, the daily chart shows that  price posted a shallow bounce from a critical support, 0.7450, the 38.2% retracement of this year's rally, and also that the price is developing below its 20 SMA, while the technical indicators have turned south, entering negative territory and maintaining bearish slopes, supporting some further slides ahead. In the 4 hours chart, the price is below its 20 SMA, while the technical indicators hold below their mid-lines, also indicating that the risk is towards the downside. 

Support levels: 0.7450 0.7410 0.7370  

Resistance levels: 0.7490 0.7540 0.7590 

Dow Jones

US stocks edged higher on Friday, recovering part of Thursday's loses and not far from the record highs posted earlier in the week. The Dow Jones Industrial Average advanced 53 points to end at 18,570.85, while the S&P advanced 9 points, to close at 2,157.03. The Nasdaq Composite added 26 points, to 5,100.16. Stocks were underpinned by positive earnings reports for the second quarter after a dismal start of the year, although the advances were moderated, ahead of upcoming FED's meeting this week. Daily basis, the DJIA retains its bullish tone, despite limited volumes have left it within its latest range, given that the index remains well above its moving averages, whilst the technical indicators hold well above their mid-lines, although with limited upward momentum. In the 4 hours chart, however, the benchmark maintains a neutral stance, standing a couple of points below a flat 20 SMA, while the technical indicators head nowhere within neutral readings. 

Support levels: 18,495 18,431 18,369

Resistance levels: 18,592 18,640 16,695

FTSE 100

The FTSE 100 closed marginally higher on Friday, up by 0.46% at 6,730.48, as poor UK PMIs readings fueled speculation of upcoming stimulus coming from the BOE next August. Also, containing declines were strong earnings reports, as Vodafone quarterly service revenue beat estimates, closing up 4.6%. The Footsie closed the week up by 0.9%, its fifth weekly win in a row, and the daily chart shows that the benchmark holds well above a bullish 20 SMA, while the Momentum indicator has bounced from near its mid-line after correcting overbought conditions, while the RSI turned higher, and stands now around 68, all of which supports further gains. In the 4 hours chart, the index maintains a neutral stance, having spent the week consolidating near its highs, holding above a modestly bullish 20 SMA, but with the technical indicators holding flat within positive territory. 

Support levels: 6,703 6,668 6,615 

Resistance levels: 6,755 6,806 6,850

DAX

European equities closed mixed last Friday, with the German DAX down 0.09% to 10,147.46, practically unchanged. Travel-related shares and banks remained under pressure with Commerzbank down 1.59% and Lufthansa shedding 1.2%, although strong PMIs contained the decline in the benchmark. The index stands at its highest since the Brexit and overall maintains a positive tone, but low volumes should prevent it from rallying sharply, at least as it holds below 10,340, June 23th daily high. Technically, the daily chart shows that dips towards the 200 SMA at 10,075 continue to attract buying interest, while the technical indicators turned modestly higher after a period of consolidation within positive territory, maintaining the risk towards the upside. In the 4 hours chart, the index holds above a bullish 20 SMA, although the technical indicators lack directional strength, steadying above their mid-lines, indicating a limited downward potential at the time being. 

Support levels: 10,075 10,010 9,943

Resistance levels: 10,194 10,253 10,312

Nikkei

The Nikkei 225 edged lower last Friday, down by 180 points or 1.09% to end the day at 16,627.25 on a stronger yen. The benchmark surged last Thursday up to 16,932, its highest in over a month, but trimmed most of its gains on waning hopes of  aggressive  easing coming from the BOJ this week. Latest Kuroda's comments took out of the table radical stimulus measures, fueling yen's recovery and therefore weighing on the index. Now poised to start the week around the mentioned close, the daily chart shows that the pair bottomed around a horizontal 100 DMA last week, now around 16,441, while the technical indicators hold flat within positive territory, and the 20 SMA heads higher far below the current level, maintaining the downside risk limited. In the 4 hours chart, the index is below a horizontal 20 SMA around 16,668, the immediate resistance,  while the technical indicators hold flat within negative territory, supporting a downward continuation on a break below the mentioned 100 DMA.

Support levels: 16,582 16,515 16,441

Resistance levels: 16,668 16,720 16,787

Gold

Gold prices fell last week, as expectations of a US rate hike kept rising, on the back of strong local data. Spot gold closed the week at $1,323.50 a troy ounce after falling down to 1.310.76 last Thursday, the lowest in three weeks. Adding to the negative tone of the commodity were US stocks, as the DJIA and the S&P hit record highs during these past days. The decline in the bright metal seems so far corrective, given that the price held above the 38.2% retracement of its latest bullish run around 1,308.00, although the risk of a downward move has risen, with the price contained below a flat 20 SMA and the technical indicators heading sharply lower within negative territory. In the shorter term, and according to the 4 hours chart, the commodity presents a neutral stance, with the technical indicators turning modestly higher around their mid-lines, and the price hovering around a bearish 20 SMA. A downward acceleration below the mentioned Fibonacci support is required to confirm further slides, down towards the $1,250.00 region, should demand for the greenback remains high. 

Support levels: 1,320.10 1,308.00 1,299.45    

Resistance levels: 1,333.50 1,342.50 1,351.80

WTI Crude Oil

After being under pressure ever since the week started, crude oil prices extended their decline to fresh 2-month lows on Friday, weighed by the US Baker Hughes report, showing that the number of active oil rigs in the country rose again last week. According to the report, the country added 14 rigs to total 371 in the week ending July 16th, the fourth consecutive weekly increase. West Texas Intermediate crude oil futures fell down to $43.73 a barrel, to close the day at 44.23, as the data revived fears of a global glut. Also, Iraqi exports have averaged 3.28 million barrels per day in the first three weeks of July, up from the 3.18 million bpd in June, adding to concerns. Technically, the bearish momentum accelerated by the ends of last week, and technical readings in the daily chart support some additional declines ahead, as the price has accelerated below its 100 SMA whilst the 20 SMA maintains a strong bearish slope above it, and the technical indicators have accelerated their declines within negative territory. In the 4 hours chart, the technical bias is also towards the downside, as the technical indicators head lower near oversold readings and the 20 SMA accelerated its decline above the current level, now providing a strong dynamic resistance at 45.15. 

Support levels: 43.90 43.30 42.50

Resistance levels: 44.40 45.15  45.90