The EUR/USD pair saw a modest advance this Monday

EUR/USD

The EUR/USD pair saw a modest advance this Monday, as the greenback came under some selling pressure during the American afternoon, weighed by a sharp decline in local indexes. Nevertheless, low volumes and a scarce macroeconomic calendar kept majors within limited intraday ranges. Supporting the common currency was a better-than-expected German IFO survey, showing  that local businesses were barely affected by the Brexit, as the headline index slipped from 108.7 to 108.3, against market's expectations of 107.5. The assessment of current conditions rose to 114.7 from previous 114.6, while expectations edged lower to 102.2 from previous 102.2, but beat the 101.2 forecast. In the US, the Dallas FED manufacturing business index came in for July at -1.3 from previous -18.3, but barely affected the market. 

Ahead of the Asian opening, the pair is trading below a bearish 20 SMA in the 4 hours chart, which stands around the 1.1000 level, providing an immediate dynamic resistance. In the same chart, the price is far below the 100 and 200 SMAs, indicating that the bearish trend remains in place, but the technical indicators have turned modestly higher within negative territory, far from suggesting the pair may extend its recovery further. Overall, the market is in wait-and-see mode ahead of the FED's economic policy meeting this Wednesday. The US Central Bank is expected to remain on-hold, but also to provide a more hawkish tone, amid recent upbeat data. In the meantime, the pair remains at risk of extending its decline towards the 1.0800/40 region, with spikes up to 1.1050 probably being seen as selling opportunities. 

Support levels:  1.0955 1.0910 1.0840

Resistance levels: 1.1000 1.1050 1.1090

USD/JPY

The USD/JPY pair broke below the 106.00 level during US trading hours, weighed by the negative tone of US indexes, sharply down after flirting with record highs at the beginning of the day. Japan released its June trade balance data early Monday, showing that exports were down for the ninth straight month, but fell by less-than-expected, down by 7.4% against previous -11.3%. Imports declined by 18.8%, surpassing previous -13.8% but better than the -19.7% expected. The trade surplus came in at ¥692.8B, much better than the previous  ¥-40.6B, overall positive for the local economy. Still market will wait for Friday's BOJ meeting before taking serious decision on the Japanese currency. In the short term, the 1 hour chart shows that the price has fallen below its 200 SMA for the first time since July 11th, whilst the technical indicators maintain their bearish slopes within negative territory, keeping the risk towards the downside. In the 4 hours chart, the 100 and 200 SMA converge around 104.00/15, providing a strong support in the case of a sudden decline, while the Momentum indicator retreated from the 100 level and the RSI indicator heads south around 44, also favoring a bearish extension for this Tuesday. 

Support levels:  105.80 105.40 105.05 

Resistance levels: 106.60 107.10 107.50

GBP/USD

The GBP/USD pair consolidated in a tight range in this first day of the week, adding some modest 40 pips daily basis. The Pound advanced up to 1.3164 against its American rival early Europe, but quickly retraced to the current level, holding nearby for the rest of the day. In the news front, Chancellor Philip Hammond reaffirmed that the MPC is ready to use "the monetary tolls at their disposal" during the weekend's G20 meeting, further signaling the UK's intention of loosening monetary policy in the nearest term. The CBI industrial trends survey for July saw total orders fall from -2 to -4, which was better than the -6 expected by consensus, in line with latest decline in local manufacturing confidence. From a technical point of view, there's little to add to recent updates, with the pair still in a consolidative phase ahead of a clearer economic and political picture. In the 4 hours chart, the price holds below a horizontal 20 SMA, currently around 1.3165, while the technical indicators hold within negative territory, with no directional strength. 

Support levels: 1.3115 1.3080 1.3045 

Resistance levels: 1.3165 1.3200 1.3245

AUD/USD

The AUD/USD pair advanced up to 0.7492 at the beginning of the day, but trimmed most of its daily gains ahead of the close, amid the poor performance of commodities and stocks. There were no relevant data released in Australia, and there won't be any critical news until Wednesday, when the country will release its second quarter inflation figures, suggesting some further range trading for this Tuesday. Quarterly CPI has been the trigger for the latest RBA's rate cut, as during the first quarter, inflation fell beyond expected, suggesting another disappointing reading will produce a similar reaction from the Central Bank. Short term, the pair presents a neutral stance although the risk is towards the downside, particularly on a break below 0.7450, a strong Fibonacci support. In the 1 hour chart, the price is below its 20 SMA, while the technical indicators lack directional strength, stuck around their mid-lines. In the 4 hours chart, the 200 EMA contained advances around the mentioned daily high, while the price is currently developing also below a bearish 20 SMA and the technical indicators remain within negative territory, still heading nowhere. 

Support levels: 0.7450 0.7410 0.7370  

Resistance levels: 0.7490 0.7540 0.7590 

Dow Jones

Wall Street closed in the red at the beginning of the week, with energy-related stocks plummeting after oil fell to its lowest in three months. The DJIA lost 77 points or 0.42% to end at 18,493.06, while the Nasdaq Composite fell 0.05% to 5,097.63. The S&P fell 6 points or 0.30% to close at 2,168.48. Also, investors rushed to take profits out ahead of some major earnings releases and the US Federal Reserve economic policy decision this Wednesday. The DJIA fell down to 18,456, but recovered some ground ahead of the close, but technical readings suggest the decline may extend this Tuesday, given that in the daily chart, the technical indicators head sharply lower within positive territory. Still the index is well above a bullish 20 SMA, suggesting the upcoming decline may remain as corrective. In the 4 hours chart, the benchmark is now below a slightly bearish 20 SMA, currently around 18,546, while the Momentum indicator remains around its 100 line and the RSI indicator bounced from near oversold readings, also suggesting any bearish move will remain limited. 

Support levels: 18,456 18,369 18,398

Resistance levels: 18,546 18,592 18,640 

FTSE 100

The FTSE 100 closed down 20 points or 0.30% at 6,710.13, weighed by a sharp decline in oil prices that sent the energy-related sector lower. Oil producer BP led the decline, down by 2.6% while Royal Dutch Shell shed 2.54% as crude fell to fresh 3-month lows on resurging fears of a global glut. Mining shares also edged lower, as gold fell, with Randgold Resources ending the day 3.4% lower. Ahead of major earnings reports and a couple of Central Banks' decisions, the benchmark managed to extend its rally up to 6,760 intraday, a fresh year high.  Technically, the daily chart shows that the benchmark posted a higher high and a higher low and that it also holds well above a bullish 20 SMA, although the Momentum indicator failed to recover and turned modestly lower within bullish territory, while the RSI heads modestly lower around 66, limiting the upside. In the 4 hours chart, the neutral stance persists, with the index flat around a modestly bullish 20 SMA and the technical indicators stuck around their mid-lines.

Support levels: 6,703 6,668 6,615 

Resistance levels: 6,760 6,806 6,850

DAX

European equities saw moderate advances at the beginning of the week, with the German DAX up by 51 points to close at 10,198.24, helped by a positive IFO survey, showing that economic sentiment in the country weakened less than expected. German new orders in the main construction industry surged monthly basis by an adjusted 3.5% in May. The benchmark traded as high as 10,261 before retreating, meeting some selling interest around the roof of the daily descendant channel that leads action since late April. Technically, the upside remains favored as indicators in the daily chart head north near overbought levels, while the index remains above its moving averages, with the 200 DMA offering a strong support at 10,076. In the shorter term, the 4 hours chart shows that 20 SMA maintains its bullish slope below the current level, while the technical indicators have retreated from near overbought levels, but turned flat above their mid-lines, rather reflecting the latest downward move than suggesting more slides ahead. 

Support levels: 10,160 10,075 10,010 

Resistance levels: 10,261 10,312 10,375

Nikkei

Asian indexes closed mixed this Monday, with the Nikkei 225 down by 7 points or 0.04% to end at 16,620.29, as investors remain in cautious mode ahead of the upcoming FED and BOJ's meeting this week. A stronger yen has weighed in the index in electronic trading, now poised to open the day around 16,550. Nintendo was the biggest loser, down 17.72% after the company said that the financial benefits from Pokemon Go will be limited. Technically, the daily chart shows that the index holds near the lower end of past week's range, above a bullish 20 DMA and a flat 100 DMA, while the technical indicators hold well above their mid-lines, with the RSI turned modestly lower within positive territory, limiting chances of an upcoming recovery. In the 4 hours chart, the risk has turned towards the downside, given that the index continues developing below a now bearish 20 SMA, while the technical indicators turned modestly lower around their mid-lines, also suggesting some further declines for the upcoming session.

Support levels: 16,515 16,441 16,387

Resistance levels: 16,597 16,668 16,720

Gold

Commodities edged lower this Monday, with spot gold down to a daily low of $1,312.25, but reversed course during the American afternoon, as the dollar weakened modestly against most of its major rivals. Still, speculation that the US Federal Reserve will offer a hawkish rhetoric on its upcoming monetary policy this week, kept the rally contained. Spot is closing the day around 1,320.00, marginally down from Friday's close, but overall maintaining the negative tone seen during the past two weeks, as in the daily chart, the 20 SMA is turning slightly lower well above the current level, while the technical indicators keep heading south within bearish territory. In the 4 hours chart, the price is unable to advance beyond a modestly bearish 20 SMA, while the RSI indicator bounced from near oversold territory, but remains within bearish territory alongside with the Momentum indicator. The price needs to break below 1,308.00, the 38.2% retracement of its latest weekly rally to confirm a bearish continuation towards that can extend down to the 1,250.00 region. 

Support levels: 1,308.00 1,299.45 1,285.80    

Resistance levels: 1,323.70 1,333.50 1,342.50

WTI Crude Oil

Crude oil prices extended their latest decline to fresh 3-month lows as fears of a global glut re-surged. West Texas Intermediate crude oil price fell to $42.95 a barrel,  ending the day roughly 2.6% lower as data coming from Genscape, a market intelligence firm, suggest that US inventories at the Cushing, Oklahoma delivery base rose by 1.1 million barrels in the week ending July 22nd. The news added to the latest rise in refined oil products, and the resurgent number of US drilling oils. Holding barely above the 43.00 level, the daily chart for WTI shows that the 20 DMA is about to cross the 100 DMA towards the downside, both converging at 45.80, while the technical indicators head lower within negative territory, while the RSI accelerated lower, and stands now around 34, all of which supports a continued decline for the upcoming sessions. In the 4 hours chart, the RSI indicator is losing downward strength around 24, far from reversing, while the Momentum indicator has lost downward strength, but remains near oversold levels. In this last time frame, the 20 SMA has turned strongly lower above the current level, also reflecting the negative sentiment surrounding the black gold. 

Support levels: 42.95 42.50 42.00

Resistance levels: 43.65 44.40 45.15