The EUR/USD pair saw little action all through this Monday

EUR/USD

The EUR/USD pair saw little action all through this Monday, confined to a tight range within 1.1210 and 1.1270, unable to attract investors amid a scarce macroeconomic calendar. Stocks plunged in Asia and Europe, tracking Wall Street's Friday losses, and maintaining risk-averse trading as the main theme over the first half of the day. The greenback also benefited from FED's jawboning, as Atlanta president, Dennis Lockhart, called for a "serious discussion" over rates during the upcoming September meeting. Also, a monthly survey from the New York FED showed that inflation expectations jumped to 2.8 % in August, the highest reading this year, from 2.5% in July. 

A recovery in American indexes interrupted USD gains after the US opening, while mid US session, FED's governor Lael Brainard said that the US Central Bank must guard against the low-growth, low-inflation environment that bedevils Europe and Japan, adding that the case for raising rates is "not compelling."  Her dovish words  pushed the dollar lower across the board, with the EUR/USD pair advancing up to 1.1267, its daily high. 

Closing the day marginally higher, the pair continues lacking definitions from a technical point of view, but the fact that is holding above the 1.1200 mark is keeping bulls interested. The 4 hour chart shows that the price is trapped within its moving averages with no directional strength, whilst technical indicators  have turned higher within bearish territory, but remain below their mid-lines, suggesting a limited upward potential at the time being. A daily descendant trend line coming from this year high of 1.1615, stands today around 1.1290, being the level to surpass to see a more sustainable recovery during the upcoming sessions. 

Support levels: 1.1200 1.1160 1.1120 

Resistance levels: 1.1290 1.1335 1.1370

USD/JPY

After breaking below the 102.00 level, the USD/JPY pair accelerated its decline and tested 101.55, following FED's Brainard dovish comments over inflation being well below FED's target and therefore that  the case for tighten monetary policy preemptively is less compelling. The Japanese yen got a boost from falling stocks during the first half of the day, and remained unable to recover above the 102.00 level afterwards, in spite of Lockhart hawkish comments, indicating that the bearish risk has increased exponentially. Short term, the 1 hour chart shows that the price is being capped by a bearish 100 SMA, whilst technical indicators head south near oversold readings,  favoring a continued decline. In the 4 hours chart, the price has broken below its 100 and  200 SMAs, while technical indicators have turned sharply lower, with the Momentum entering negative territory and the RSI accelerating its decline around 36, supporting a continued decline towards 100.65, a major long term Fibonacci support.

Support levels: 101.50 101.10 100.65   

Resistance levels: 102.10 102.50 102.

GBP/USD

The GBP/USD pair advanced in this dull Monday, spiking up to 1.3347 after FED's Brainard dovish wording, but quickly retreated back, struggling to establish itself above the key Fibonacci level of 1.3320. In the news front, there were no macroeconomic releases in the UK, but former Prime Minister, David Cameron, announced that he will stand down as a member of Parliament for his constituency of Witney immediately, triggering a by-election, arguing that he did not want to be a "distraction" for the new UK PM, Theresa May. The UK will release its August PPI and CPI figures this Tuesday, generally expected to beat July figures. If that is the case, the market will rush to price in some BOE's inaction this Thursday, which may result in the Pound edging lower, instead of rising on good news. Technically, the 1 hour chart shows that  indicators are mostly flat near overbought readings, but also that the 20 SMA is gaining upward strength below the current level. In the 4 hours chart,  technical indicators are entering positive territory, as the price advances above a now flat 20 SMA, all of which supports some further gains for the upcoming sessions. 

Support levels: 1.3280 1.3230 1.3185 

Resistance levels: 1.3365 1.3400 1.3445 

AUD/USD

The AUD/USD pair fell down to 0.,7493 this Monday, weighed by a sharp decline in commodities and stocks, although the pair reversed course in the US session alongside with the mentioned assets, as FED's Brainard poured some cold water over an US rate hike hopes. The pair entered positive territory ahead of the US close, and maintains a strong bullish tone in the short term, as in the 1 hour chart, the price accelerated higher after breaking above its 20 SMA, now turning higher around 0.7280, while indicators head north within positive territory as the price advances to fresh daily highs. In the 4 hours chart, indicators are bouncing sharply from oversold levels, but remain well below their mid-lines, whilst the 200 EMA stands around a major Fibonacci resistance at 0.7600, and the 20 SMA maintains a strong bearish slope a few pips above this last. The ongoing recovery will face some selling interest if it extends up to the mentioned level, while further gains beyond it should lead to an approach to the 0.7700 region. 

Support levels: 0.7490 0.7450 0.7410

Resistance levels: 0.7530 0.7565 0.7600 

Dow Jones

Wall Street changed course this Monday, after hopes for a US rate hike cooled down following FED's Brainard comments. The Dow Jones Industrial Average advanced 1.32% or 239 points to close at 18,325.07, while the Nasdaq Composite gained 1.68% to 5,211.89 and the S&P 1.47% to 2,159.04. The Dow Jones initially plunged to 17,900, its lowest in two months, but erased most of its Friday's losses, paring gains, however, around the 18,300 region, in where the pair found buyers for most of the past month of August.  That said, the daily chart shows that the index is back above its 100 DMA, while indicators turned sharply higher from oversold levels and are poised to enter positive territory, all of which suggests that further gains beyond the current region could see the benchmark returning to recent highs around 18,700. Shorter term, the 4 hours chart shows that the index is now a few points above a still bearish 20 SMA, while the technical indicators have turned flat within negative territory after correcting extreme oversold readings, not enough to confirm an upward extension. 

Support levels: 18,259 18,214 18,148

Resistance levels: 18,355 18,417 18,473

FTSE 100

The FTSE 100 closed the day at 6,700.90, down by 1.12% as risk aversion added to speculation that the US would raise rates in the nearest term. Mining and energy-related equities edged lower, with Anglo American closing down 3.2% and Royal Dutch Shell shedding 1.63%. A recovery in oil prices and a dovish stance from a FED speaker, however, helped the benchmark bounce after the close, and stands now around 6,762. The index has managed to extend beyond Friday's close, but the downward risk persists, as in the daily chart,  it holds far below a bearish 20 SMA, while indicators hover directionless within negative territory. In the 4 hours chart, the 20 SMA keeps heading lower above the current level and after breaking below the 100 SMA, while indicators have turned flat below their mid-lines after correcting oversold readings. Renewed selling pressure below 6,723 should signal a downward extension, back towards Monday intraday low of 6,654.

Support levels: 6,723 6,694 6,654

Resistance levels: 6,782 6,809 6,865

DAX

European equities closed sharply lower this Monday, dragged lower by previous declines in Asia and America, with the German DAX losing a whopping 1.34% or 141 points, to end the day at 10,431.77. The German benchmark gapped lower at the weekly opening, and traded as low as 10,320, level last seen on August 5th. Bank-related equities were among the biggest losers, with Commerzbank ending the day 1.10% lower and Deutsche Bank closing down 1.02%. The index, however,  recovered above Friday's close in futures trading, and stands now around 10,540, tracking Wall Street's Monday gains. From a technical point of view, the upward potential is still limited, as in the daily chart and despite the strong comeback, the index has posted a lower low and a lower high while trading below a bearish 20 SMA, currently at 10,602. In the same chart, the Momentum indicator is stuck around its 100 level while the RSI hovers around 50, not enough to support some further advances. In the 4 hours chart, the benchmark has tested its 200 SMA before recovering, but remains below the 20 and 100 SMAs, while indicators aim higher within negative territory, something that at least will limit declines this Tuesday. 

Support levels: 10,476 10,438 10,387 

Resistance levels: 10,602 10,651 10,716

Nikkei

Asian equities plunged, falling by the most since June 24th, tracking Friday's Wall Street losses, with the Nikkei 225 losing 292 points or 1.73% to close the day at 16,672.92. Data coming from Japan added to the negative sentiment, as the Domestic Corporate Goods Price index fell by more than expected, down by 3.6% in August when compared to a year before, and by 0.3% when compared to July. The benchmark recovered in after hours trading, and trimmed all of its daily losses, now poised to open the day around 16,767. The daily chart shows that the index is around its 20 DMA, and a few points below  a bearish 200 DMA, the immediate resistance at 16,802. In the same chart, the technical indicators head modestly lower within neutral territory, not enough to confirm a bearish extension for this Tuesday. In fact, Wall Street's recovery will likely help the Nikkei advance further. In the shorter term, the 4 hours chart shows that the index is still below a bearish 20 SMA, around 16,872, while technical indicators have bounced from oversold readings, and maintain bullish slopes within negative territory, supporting the case of a recovery, should the price advance above the mentioned 16,802 level. 

Support levels: 16,703 16,630 16,542

Resistance levels: 16,802 16,872 16,942

Gold

Spot gold trimmed all of its daily losses and closed the day pretty much flat around $1,329.00 a troy ounce, after trading as low as 1,320.36 earlier in the day. Despite risk aversion dominated the Asian and European sessions, gold prices were unable to rally, as hopes over a US rate hike were still high and therefore kept the commodity under selling pressure. It was FED' Brainard the one who saved the day, by playing down chances of a September hike. The technical picture is now neutral, as in the daily chart shows that the price is still stuck to a modestly bearish 20 SMA, while technical indicators lack directional strength within neutral territory. The price is still below the 1,333/5.00 region, a major static resistance where several intraday highs and lows converge with a Fibonacci retracement, which means that only on an advance beyond this region, the upside will be favored. Shorter term, and according to the 4 hours chart, the upward potential is limited, as indicators bounced from near oversold readings, but remain far below their mid-lines, while the 20 SMA has turned sharply lower and crossed below the 200 SMA above the current level. 

Support levels: 1,324.60 1,313.10 1,302.45

Resistance levels: 1,333.90 1,342.50 1,351.10

WTI Crude Oil

West Texas Intermediate crude oil futures traded as low as $44.71 a barrel this Monday, but recovered ground as the greenback came under selling pressure, ending the day a few cents above the 46.00 level. A report from the Organization of the Petroleum Exporting Countries estimating that oil output from non-OPEC producers  would grow more quickly than it originally estimated in 2017, was behind the initial decline. The commodity pared gains after reaching is 100 DMA, and is now trading around a mild bearish 20 DMA, while technical indicators  in the daily chart, hover within negative territory with no clear directional strength. In the 4 hours chart, the price is stuck around 46.20, where the 20 SMA converges with the 100 SMA, while indicators have turned flat around their mid-lines, giving no clues on what's next for WTI. The upward potential is limited, despite dollar's current weakness, as hopes for an output deal among worldwide producers have decreased substantially. Nevertheless, an advance beyond 47.00 should favor some further gains towards  the 47.70 level, September 8th high. 

Support levels: 45.50 44.90 44.35 

Resistance levels: 47.00 47.70 48.55