The EUR/USD pair fell towards the 1.0400 by the end of the day

EUR/USD

The EUR/USD pair fell towards the 1.0400 by the end of the day, having trimmed all of the its Friday's modest gains, as despite the limited intraday volume on a scarce calendar, the dollar remained strong. The American currency started the day with a soft tone, with the pair up to 1.0479 intraday. Data coming from Europe was encouraging, whilst US numbers missed expectations, yet the pair fell anyway, indicating that the dominant bearish trend remains firm in place.

Germany released is December IFO survey, which showed that business confidence rose  to its highest since February 2014, up to 111.00 in December from 110.4 in November. Most of the improvement came from the assessment of the current situation, which jumped from 115.6 to 116.6, while expectations were little changed at 105.6. In the US, the preliminary Markit Services PMI for December was somewhat a disappointing, coming in  at 53.4 from an expected 55.2. Still implying solid growth in the sector, the rate of expansion eased from October's peak amid a slightly softer rise in new work, according to the official report.

The upward potential seems well limited for the pair, with the dollar paring gains but far from changing bias. Holding below 2015 low,  the 4 hours chart shows that a bearish 20 SMA has contained advances, having accelerated its slide below the larger ones, while technical indicators have managed to correct the extreme oversold conditions reached late last week. The Momentum indicator holds around its 100 level, while the RSI indicator resumed its decline, now around 35, both denying chances of additional gains ahead. Further upward corrections are likely only on a break above 1.0480, with selling interest probably resurging at higher levels, between 1.0520 and 1.0560. Below 1.0400 on the other hand, the pair has chances to extend its decline further below the year low of 1.0365, approaching to the 1.0300/20 price zone.

Support levels: 1.0400 1.0365 1.0320

Resistance levels: 1.0480 1.0520 1.0560

USD/JPY

The USD/JPY pair fell down to 116.54, its lowest since last Wednesday, with the Japanese yen fueled by retreating US Treasuries yields and a disappointing US Markit Services preliminary PMI for December, which came in at 53.4, below expectations of 55.2 and November final reading of 54.6. The Bank of Japan will unveil its latest monetary policy decision during the upcoming Asian session, but considering the significant depreciation of the JPY ever since Donald Trump won US election, seems unlikely that policymakers will add something new to their ongoing programs. Raters are expected to remain unchanged at -0.10%, while the yield curve control parameters are also expected to remain unchanged. Down for a second consecutive day, the intraday picture for the USD/JPY favors limited slides, as technical indicators have entered bearish territory, but lost their downward strength, whilst the price has recovered from well above a bullish 100 SMA, now around 114.70. December 12th low at 116.12 is the level to watch during the upcoming session, as only a break below it will favor additional declines towards the mentioned 100 SMA.

Support levels: 117.45 117.00 116.60

Resistance levels: 118.20 118.65 119.10

GBP/USD

The Sterling Pound fell to a fresh December low against the greenback, undermined by headlines suggesting Scotland will call for a new referendum to leave the UK, if Brexit implies leaving the single EU market. The GBP/USD pair fell to 1.2355 but bounced back to 1.2426 on tepid US data, failing, however, to sustain gains beyond the 1.2400 level, and at risk of further slides. There were no macroeconomic releases in the UK and in fact the macroeconomic calendar will remain pretty light until next Friday, when the kingdom will release its Q3 GDP figures. Worse-than-expected US Markit Services PMI helped the pair to bounce up to 1.2426 during the US afternoon, but the pair is struggling to hold on to gains above the 1.2400 mark. Technically, the  4 hours chart shows that a strongly bearish 20 SMA contained rally, now offering a dynamic resistance around 1.2465, while technical indicators have recovered from oversold territory, with the Momentum aiming higher right below its 100 level and the RSI at 35, below previous daily highs, limiting chances of a steeper recovery for this Tuesday. The pair has a major mid-term support around 1.2330, and a break below it will likely open doors for a continued slide towards the 1.2000 region during the upcoming sessions.

Support levels:  1.2365 1.2330 1.2290

Resistance levels: 1.2425 1.2465 1.2500

AUD/USD

The AUD/USD pair fell to a fresh 6-month low of 0.7242 this Monday, dragged lower by a slump in base metals' prices, and holding nearby at the end of the day, usually a sign of further falls to come. Copper fell around 3% to its lowest in 4-weeks, as inventories showed their biggest one-day rise in 15 years. Zinc also tumbled, shedding over 5%, with base metals giving back part of the large gains achieved post-US elections, on hopes Trump´s infrastructure investment promises will fuel demand.  The Reserve Bank of Australia will release the minutes of its latest meeting during the upcoming session, although no surprises are expected there. From a technical point of view, the decline is short term overstretched, as the RSI indicator stands in extreme oversold territory in almost all intraday timeframes, but in the 4 hours chart it keeps heading south, despite at 23, whilst the 20 SMA has accelerated its decline above the current level, now nearing a major Fibonacci resistance at 0.7330, all of which favors a new leg lower, with scope to test 0.7210, the 61.8% retracement of this yearly rally.

Support levels: 0.7210 0.7175 0.7140

Resistance levels: 0.7260 0.7295 0.7330

Dow Jones

US stocks posted modest advances this Monday, with the DJIA adding 32 points to close at 19,876.10, not far below the record highs posted last week. The Nasdaq Composite gained 0.58% to settle at 5,468.74, while the S&P advanced 0.23%, to 2,263.36. Volumes across the financial world were thinner than usual ahead of winter holidays, whilst a scarce macroeconomic calendar failed to provide intraday triggers. The DJIA daily chart shows that technical indicators have turned modestly higher, but still lack directional strength, holding within overbought levels, whilst a bullish 20 DMA is currently at 19,510, far below the current level, maintaining the risk towards the upside. In the 4 hours chart, the benchmark maintains its neutral stance, hovering around a horizontal 20 SMA while the Momentum indicator remains stuck around its 100 level and the RSI indicator holds around 58, also lacking clear directional strength. The index is at risk of correcting lower, although a test of the 20,000 threshold can't be disregarded before investors decide to take profits out before year-end.

Support levels: 19,828 19,746 19,669                                                                                          

Resistance levels: 19,912 19,964 20,010

FTSE 100

The FTSE 100 added 5 points to its latest advance, settling at 7,017.16 trimming its early losses amid a weak Pound.  There were no clear leading sector among the London benchmark, with Hikma Pharmaceuticals leading gainers, up by 3.85%, followed by Reckitt Benckiser Group that closed up by 2.72 and Randgold Resources, which added 2.33%. Ashtead Group was the worst performer, down by 4.78% daily basis, followed by Standard Chartered that shed 2.82%. From a technical point of view, the daily chart shows that technical indicators have lost directional strength within positive territory, rather due to the limited intraday that because of decreasing buying interest, while the index holds well above the 20 and 100 DMAs, both converging around 6,868, a critical support. In the 4 hours chart, the 20 SMA maintains a strong upward slope below the current level, while technical indicators are retreating within positive territory, but still above their mid-lines, limiting chances of a steeper slide for this Tuesday.

Support levels: 6,960 6,926 6,868

Resistance levels: 7,044 7,073 7,126

DAX

The German DAX advanced 22 points to settle at 11,426.70, with most European equities posting modest gains this Monday. The advance was led by the banking sector, after one of Italian´s largest lenders, UniCredit Spa, announced a restructuring plan which includes cutting jobs and launching a €13 billion rights issue by the end of March. Among the DAX, Consumer staples Beiersdorf was the best performer, up by 1.53%, followed by Vonovia that rose 1.44%. German banks were unable to follow their regional counterparts, with Deutsche bank leading losers' list, down by 3.37%, followed by Commerzbank that shed 3.08%. The daily chart for the index shows that it holds near the 11,400 level ahead of Tuesday's Asian opening, with technical indicators losing upward strength but still around overbought readings, suggesting limited downward scope at this levels. In the shorter term, and according to the 4 hours chart, the index remains above a bullish 20 SMA, while the Momentum indicator heads nowhere around neutral territory and the RSI indicator retreats from overbought readings, suggesting the index may correct lower in the nearest term.

Support levels: 11,346 11,299 11,245

Resistance levels: 11,433 11,470 11,520

Nikkei

Asian shares closed in the red, with the Nikkei 225 posting a limited slide, down 9 points to 19.391.60. The benchmark snapped a nine-day winning streak, as the Japanese yen strengthened against all of its major rivals, following a decline in US yields and stocks. Astellas Pharma was the best performer, up by 2.19%, followed by Suzuki Motor that added 1.94%. Still falling issues outnumbered rising ones, with DeNA Co. plunging by 7.67%, as the game maker suffered alongside with Nintendo from  negative reviews over the just-lunched new Super Mario Run app. DeNA Co. helped develop the game, and accumulates a 14% decline ever since the game was launched last December 15th. Holding near the mentioned close, the daily chart shows that the positive tone persists, with technical indicators consolidating within overbought territory and the index still far above a bullish 20 DMA. In the 4 hours chart, however, the technical outlook is neutral-to-bearish, as the benchmark is stuck around its 20 SMA, whilst technical indicators turned modestly lower around their mid-lines.

Support levels: 19,356 19,277 19,216

Resistance levels: 19,447 19,492 19,542

Gold

Gold prices saw a modest recovery this Monday, with spot up to $1,142.30 a troy ounce at the beginning of the day, although the bright metal trimmed most of its daily gains ahead of Wall Street's close, settling around 1,137.85. Tensions between China and the US helped the bright metal, as by the end of last week, Chinese navy seized an oceanographic drone from the USNS Bowditch from the South China Sea, but there were no further consequences, and China agreed this Monday to return the seized US drone in an appropriate manner, although no details have been yet unveiled. Technically, the bearish trend remains firm in place, with the price still contained within a bearish channel and well below its 20 SMA, whilst technical indicators have partially corrected extreme oversold readings before turning flat. In the 4 hours chart, the price is struggling around a bearish 20 SMA, the Momentum indicator has lost upward strength after entering positive territory, while the RSI resumed its slide, and is currently at 44, all of which supports some further declines ahead.

Support levels: 1,122.60 1,114.80 1,094.30                                                                               

Resistance levels: 1,142.50 1,151.20 1,164.05

WTI Crude Oil

Crude oil prices were little changed this Monday, with West Texas Intermediate futures settling around $53.04 a barrel, having recovered from a daily low of 52.55 in the US afternoon, following news that Russian ambassador to Turkey was shot and killed in Ankara, increasing the risk of geopolitical woes in the region. Also, limiting the downside were news over the weekend porting that Libya’s National Oil Co. has called a halt to the planned re-launch of production at oil fields in the country’s western regions. The daily chart shows that the Momentum indicator corrected further lower within positive territory before tuning flat right above its 100 level, while the RSI indicator consolidates around 61. In the same chart, the 20 DMA maintains a strong bullish slope below the current level, all of which limits the risk of a bearish move. In the 4 hours chart, the commodity held above a directionless 20 SMA, while technical indicators also lack directional strength, but hold within positive territory, in line with the longer term perspective.

Support levels: 52.55 51.60 50.90                                                                                                 

Resistance levels:  53.60 54.20 54.95