The American dollar weakened against most of its major rivals this Thursday

EUR/USD

The American dollar weakened against most of its major rivals this Thursday, as despite the FOMC upgraded the wording in its statement, it was not enough to convince markets that a rate hike will be delivered this year. The EUR/USD pair surged to its highest in two weeks, printing 1.1119 after London opening, but trimmed most of its daily gains as investors rushed into profit taking on failure to follow through the level. 

The macroeconomic calendar was fulfilled with minor data that did little for currencies. In Europe, German and Spanish labor market reports showed improvement, the EU economic indicator for July showed a modest increase, from 104.4 to 104.6, while German inflation ticked modestly higher, up by 0.3% in July, from previous 0.1% and the 0.3% expected. In the US, the number of people who filed for unemployment benefits last week rose from a three-month low, up by 14,000 to 266,000 in the week ended July 22nd, while the Trade balance deficit widened to $63.3B. Things, however, will be far more interesting this Friday, with Q2 GDP readings for the EU and the US, European inflation and German Retail Sales.

The EUR/USD pair settled around 1.1070, back to its post-Brexit comfort zone, and with limited upward scope according to the 4 hours chart, given that the price retreated from a key resistance, a bearish 200 SMA, while in the same chart, the RSI indicator retreated from overbought territory, heading now south within positive levels, as the Momentum indicator also heads lower above its 100 level. An extension below 1.1050 could see the pair extending its decline down to 1.1000, but further slide seem unlikely, unless US data surprise to the upside. 

Support levels: 1.1050 1.1000 1.0960 

Resistance levels: 1.1120 1.1160 1.1200

USD/JPY

The USD/JPY pair plummeted to 104.47 on dollar's weakness, but spent the day recovering modestly ahead of Japan's National and Tokyo inflation data, and the BOJ's decision. The pair accelerated higher, breaking through the 105.00 figure late in the US afternoon, on reports suggesting that the Bank of Japan is considering specific easing steps to announced this Friday. Still, the Central Bank has a large history of disappointing markets in their meetings and missing opportunities to act with the right timing, with current yen selling looking a bit too bold, ahead of the event. Japan will also release its June National CPI figures over the upcoming hours, and Tokyo July CPI data alongside with other major macroeconomic readings, promising some action around the JPY crosses for the upcoming Asian session. The short term picture is now bullish, as in the 1 hour chart, the price is currently breaking above its 100 SMA, while the technical indicators head north above their mid-lines. In the 4 hours chart, the price has once again recovered after testing a bullish 100 SMA, while the Momentum indicator heads higher above the 100 level, and the RSI also heads sharply higher around 52, supporting some further gains ahead. Nevertheless, the last word on upcoming yen's direction will come from the BOJ.   

Support levels: 105.05 104.60 104.20 

Resistance levels: 105.80 106.25 106.70

GBP/USD

The GBP/USD pair traded as high as 1.3247 at the beginning of the day, but Pound self-weakness has weighed more, with the pair quickly retreating sub-1.3200. Despite US data disappointed, the pair fell to a fresh daily low in the American afternoon of 1.3116, barely recovering from it by the end of the day. There were no macroeconomic news in the UK, although a YouGov survey, suggesting that the UK consumer confidence was at a 6-year low, put additional weigh on the Sterling. From a technical point of view, nothing has changed in the pair: spikes above the 1.3200 level are clearly seen as selling opportunities, although a bearish breakout beyond the 1.3000 figure still seems unlikely ahead of the next BOE meeting. Short term, the risk remains towards the downside, as in the 1 hour chart, the price is well below its 20 SMA, while the technical indicators remain  below their mid-lines, with no upward strength.  In the 4 hours chart, the neutral stance persists, with the price stuck around a horizontal 20 SMA now at 1.3135, and the technical indicators moving back and forth around their mid-lines. 

Support levels: 1.3110 1.3065 1.3030  

Resistance levels: 1.3170 1.3220 1.3260

AUD/USD

The AUD/USD pair advanced up to 0.7541 this Thursday, as demand for higher yielding assets re-surged after the FOMC. But the commodity related currency retreated to end the day around the 0.7500 figure, as oil and gold prices edged lower. During the upcoming Asian session, Australia will release its PPI Q2 data, which could give further clues on what's next from the RBA. Given that the early advance remained contained within the early weekly range, chances of a steeper recovery are still low. The short term technical picture favors a bearish extension, as in the 1 hour chart, the price has extended well below its 20 SMA, while the technical indicators maintain their bearish slopes within negative territory. In the 4 hours chart the price is  pressuring its 20 SMA, currently around 0.7490, and the immediate support, while the technical indicators have crossed their mid-lines towards the downside, also supporting a downward continuation towards the critical 0.7450 Fibonacci support. 

Support levels: 0.7490 0.7450 0.7410 

Resistance levels: 0.7530 0.7580 0.7625

Dow Jones

US Indexes closed mixed not far from their opening levels for a second day in-a-row, with the Dow Jones Industrial Average down 0.09% or 14 points, to end at 18,456.35. The Nasdaq Composite added 15 points to 0.3% to end at 5,154.98, while the S&P added 3 points to 2,170.06. The Dow plunged at the beginning of the day, reaching a daily low of 18,367, but trimmed most of its daily losses before the close, with stocks underpinned by a raft of positive earnings results. As for the technical picture, the daily chart shows that the index tested its 20 SMA before bouncing, whilst the technical indicators keep heading lower within positive territory, with the Momentum nearing its mid-line. In the 4 hours chart, the index remains capped by a  modestly bearish 20 SMA, while the Momentum indicator heads higher around its midline, and the RSI indicator turned flat right below its mid-line, presenting  limited upward potential at the time being. 

Support levels: 18,387 18,313 18,262

Resistance levels: 18,520 18,571 18,640 

FTSE 100

The FTSE 100 extended its consolidative phase near fresh yearly highs, having closed the day down by 29 points at 6,721.06. On the winning side was Rolls-Royce that surged 13.52% in London on better-than-expected earnings, but it was not enough to lift the FTSE,  weighed by falling banking stocks, and commodity-related equities, down on poor earnings reports and falling oil prices. Lloyds fell by 5.8% after announcing is planning to cut 3,000 jobs, while Standard Chartered closed 2.9% lower. Royal Dutch Shell fell by 2.54% after reporting lower-than-expected profits. In the daily chart, the Momentum indicator has turned modestly lower, but remains above its 100 level, while the RSI continues consolidating near overbought levels, indicating a limited downward potential. In the 4 hours chart, the index maintains a neutral stance, hovering around a flat 20 SMA, whilst the technical indicators remain stuck around their mid-lines, with no certain directional strength. 

Support levels: 6,703 6,668 6,615 

Resistance levels: 6,752 6,806 6,850

DAX

European equities edged lower, with the German DAX closing the day down 0.43% at 10,274.34, with banks and automakers leading the decline. Advanced inflation readings in Germany suggest that the CPI rose by 0.4% this July and compared to a year earlier, but that was not enough to support the index. Deutsche Bank led the decline, down by 3.12%, followed by Volkswagen, down by 2.34% and Daimler that shed 1.84%, these lasts, weighed by weaker-than-expected Q2 results from Ford. The DAX recovered ground in futures trading, now around 10,346, holding near the intraday high set at 10,383. In the daily chart, the index completed a pullback to the broken descendant trend line before regaining the upside, while the RSI indicator heads north around 65, supporting some additional gains for this Friday, although the Momentum indicator has turned modestly lower within overbought territory, which means the index may correct lower before recovering back. In the shorter term, and according to the 4 hours chart, the technical outlook  is neutral-to-bullish, as the index holds well above a bullish 20 SMA, whilst the technical indicators hold within positive territory, but with quite limited upward strength. 

Support levels: 10,331 10,260 10,213 

Resistance levels: 10,383 10,440 10,495

Nikkei

Asian share markets closed in the red, with the Nikkei 225 down by 1.13% or 185 points, to end at 16,476.84. Also, a stronger Japanese yen dragged the benchmark lower, as an on-hold stance from the FED, hit the greenback, while investors turned cautious ahead of the BOJ. FUJIFILM Holdings plunged 9.90%, while the Sumitomo Mitsui Financial group shed 9.36% after reporting disappointing quarterly results. The index recovered in electronic trading, now pointing to open higher around 16.570, although the daily chart shows that the technical indicators head modestly lower within positive territory, whilst the benchmark briefly fell below its 100 SMA, all of which increases the risk of a downward extension. In the 4 hours chart, the technical bias is neutral, with the index above a horizontal 20 SMA, currently at 16,533 and the technical indicators turning lower within neutral readings. 

Support levels: 16,533 16,475 16,402

Resistance levels: 16,622 16,692 16,772

Gold

Spot gold extended its rally up to $1,345.58 a troy ounce this Thursday, its highest in two weeks, but closed the day marginally lower around 1,335.50. The bright metal surged on news that the FED will likely remain on-hold this year, but pared gains and retreated as investors rushed to take profits out ahead of the upcoming BOJ's decision. The daily chart shows that the commodity held above the 23.6% retracement of its latest bullish run, the immediate support at 1,333.50, whilst the price failed to establish above a modestly bearish 20 SMA. Also, the chart shows that the RSI turned lower around 54 and that the Momentum indicator is unable to advance beyond the 100 level, all of which indicates a limited upward scope. In the 4 hours chart,  the price remains above a bullish 20 SMA, now at 1,326.65, while the technical indicators turned flat within positive territory, after correcting overbought conditions, indicating that the commodity may resume its slide on a break below the mentioned 20 SMA. 

Support levels: 1,333.50 1,326.65 1,314.25    

Resistance levels: 1,345.70 1,354.90 1,365.90

WTI Crude Oil

Crude oil prices extended their declines this Thursday, with US oil futures down to $41.02 a barrel, a fresh 3-month low. The US EIA reported that supplies of natural-gas rose 17 billion cubic feet for the week ended July 22. That was below the average rise of 27 billion cubic feet expected by analysts, but total stocks now stand at 3.294 trillion cubic feet, up 436 billion cubic feet from a year ago and 524 billion cubic feet above the five-year average. The glut of gasoline and other refined products is driven crude prices lower, which are currently threatening to extend their bearish run below the 40.00 level.  West Texas Intermediate crude oil futures are down for a sixth consecutive day, and technical readings in the daily chart support some further slides, given that the technical indicators maintain their sharp bearish slopes, despite the RSI indicator is currently at 28, whilst the 20 DMA has extended its decline well above the current level. In the 4 hours chart, the price still develops well below its moving averages, while the technical indicators turned modestly lower within oversold territory, in line with the longer term outlook. 

Support levels: 40.00 39.40 38.80

Resistance levels: 41.40 42.10 42.75