The American dollar was trading with a soft tone ahead of the main event of the day

EUR/USD

The American dollar was trading with a soft tone ahead of the main event of the day, the ECB economic policy decision. The message from Mario Draghi ended up being taken as dovish, as despite he left doors open for new easing, he failed to provide details or clues on what or when. The European Central bank left its economic policies unchanged, while announcing some minor adjustments in its  growth´s forecast that were far from surprising the market. The EUR/USD pair jumped to its highest in two weeks, printing 1.1326 as Draghi said that no additional stimulus was needed at this time, but later, during the press conference, he opened doors for more facilities in the future, while called for some help from European governments, hinting the need of some fiscal stimulus in the region. 

Despite the negative start to the day, the greenback ended up gaining ground across the board. However, it remains vulnerable on speculation that the US Federal Reserve will remain on hold this month, and these intraday gains are not even close to revert the post-Payroll/ISM's losses. The EUR/USD pair 4 hours chart shows  that the price is finding some support around the 1.1240/50 region, the 50% retracement of its latest slide, while also holding above all of its moving average,  although technical indicators retreated from overbought readings, heading now lower within positive territory. The pair has an immediate intraday support in the 1.1210/20 region, as long as it holds above it, the downward risk will remain limited. Renewed buying interest above 1.1300, on the other hand, can see the pair retesting August high at 1.1366.

Support levels: 1.1215 1.1160 1.1120

Resistance levels: 1.1285 1.1330 1.1365 

USD/JPY

The Japanese yen held to its gains during the first half of the day, helped by an upward surprise coming from Q2 GDP readings, up by 0.7% in the three months to June, against expectations of 0.0%. During the past Asian session, Bank of Japan’s Deputy Governor, Hiroshi Nakaso, signaled that rates could be cut deeper into negative territory, but failed to trigger a market's reaction. The USD/JPY pair remained mute, also after the ECB's announcement, but finally broke higher on dollar's demand, up to 102.54, where it stands by Wall Street's close. The  pair  trimmed part of its weekly gains, and the short term picture has turned partially bullish, as in the 1 hour chart, indicators have resumed their advances within overbought levels after a brief consolidative stage, although the price remains below a bearish 100 SMA, currently around 102.60, and the level to surpass to confirm further gains. In the 4 hours chart, the price is now above its 100 and 200 SMAs, while indicators have bounced sharply from their oversold levels, maintaining sharp bullish slopes, but within negative territory. 

Support levels: 102.05 101.70 101.30  

Resistance levels: 102.60 102.95 103.25

GBP/USD

The GBP/USD pair extended its decline this Thursday, down to 1.3283 in the US afternoon, as investors bought back the greenback. There were no relevant macroeconomic releases in the UK, which will release its July trade balance figures for July during Friday's session, expected to show a smaller deficit than in the previous month. The pair holds around the 1.3300 figure at the end of the day, a few pips below the 1.3320 critical Fibonacci resistance, with an increasing bearish potential in the short term, as in the 1 hour chart, the price has also broken below a now bearish 20 SMA, while technical indicators have entered negative territory, now posting modest bounces from oversold readings. In the 4 hours chart, the price as accelerated its decline below a now horizontal 20 SMA, while indicators head modestly lower within negative territory, supporting some additional declines on another break below the 1.3285 support. 

Support levels: 1.3285 1.3250 1.3210

Resistance levels: 1.3320 1.3360 1.3400  

AUD/USD

The Australian dollar advanced up to 0.7732 against the greenback, its highest in almost three weeks, underpinned by a sharp advance in natural gas prices which added roughly 4% after the large draw-down in stockpiles announced by the API report late Wednesday. Natural gas is Australia´s third largest export. Also, supporting the antipodean currency was an upward surprise from Chinese imports figures, as despite exports weakened in the country, imports rose by 1.5% in August after falling by 12.5% in July. The AUD/USD pair, however, eased after the ECB's disappointing decision, accelerating its decline in the US afternoon to close the day around 0.7640, not far from its daily low. Given that the price remains well above the 0.7600 level, the risk of a steeper decline seems limited, although in the short term, the risk has turned towards the downside, as the price has broken below its 20 SMA, whilst indicators have decelerated their declines but remain close to oversold readings. In the 4 hours chart,  indicators head lower almost vertically, crossing their mid-lines into negative territory,  and coming from overbought levels, whilst the price is currently breaking blow a still bullish 20 SMA, supporting a test of the mentioned 0.7600 figure. 

Support levels:  0.7640 0.7600 0.7570

Resistance levels: 0.7690 0.7730 0.7770 

Dow Jones

Wall Street closed with some modest losses, with the Dow Jones Industrial Average shedding 46 points to end at 18,479.91. The Nasdaq Composite shed 24 points, to 5,259.48, while the S&P closed 0.22% lower at 2,181.30. Energy-related equities gained the most, underpinned by oil's advance, with Chevron up 1.21% being the best performer, and Exxon Mobile ending the day up 0.92%. The Down fell down to the lower end of this week's range, and holds nearby after the close, maintaining the neutral stance in the  daily chart, as the index is now extending below a horizontal 20 SMA, although technical indicators are turning modestly lower around their mid-lines. In the shorter term, and according to the 4 hours chart, the index is now a congestion of moving averages that remain confined within a tight range indicating the absence of directional strength, while the RSI gains bearish strength around 42, indicating that the risk is towards the downside. 

Support levels: 18,410 18,356 18,295

Resistance levels: 18,508 18,556 18,599 

FTSE 100

The FTSE 100 closed 12 points higher at 6,858.70, as Micro Focus, a UK technology firm that entered the FTSE last week,  surged by over 21% intraday after the firm announced that is acquiring the software arm of Hewlett Packard Enterprise, closing the day up by 14.73%. Banking related shares also performed well, with Royal Bank of Scotland adding 2.59% and Lloyds Banking group closing up by 2.15%. The index lacks directional strength in the daily chart, stuck around its 20 DMA but far above 100 and 200 DMAs, whilst indicators head nowhere around their mid-lines. In the 4 hours chart, the index is also unable to define a certain direction, with technical readings also lacking directional strength, albeit the benchmark is unable to break below its 20 and 100 SMAs, suggesting that the bearish potential remains limited. This week low stands at 6,813, with a break below it required to confirm a steeper decline for the upcoming sessions. 

Support levels: 6,813 6,754 6,712 

Resistance levels: 6,868 6,931 6,968 

DAX

European equities turned south after the ECB's announcement, with the German DAX falling 77 points or 0.72%, to close the day at 10,675.29. Investors were disappointed as ECB's head, Mario Draghi said that the Central Bank did not discuss an extension of its easing program, as they remain focused in implementation. The German DAX trimmed half of its daily losses ahead of the close, consolidating around the mentioned level during the US session. The banking sector extended its advance, with Deutsche Bank up 1.67% and Commerzbank adding 0.41%. From a technical point of view, the daily chart shows that the index remains above its 20 SMA that anyway has lost its bullish strength, while the RSI indicator turned lower within positive territory as the Momentum heads nowhere around its 100 line. In the 4 hours chart, the index is now below its 20 SMA, while indicators turned higher after entering negative territory, but lack clear directional strength at the time being. 

Support levels: 10,708 10,675 10,626 

Resistance levels: 10,769 10,807 10,854 

Nikkei

The Nikkei closed the day down at 16,958.77, once again weighed by yen's strength. Investors were cautious ahead of the ECB announcement, and more, over the uncertainty surrounding the next BOJ's decision. The benchmark recovered in after hours trading, as the yen fell sharply against its American rival, and is now poised to open the day right below the 17,000. Sentiment however, is sour when it comes to stocks, with Wall Street ending the day in the red, something that should limited advances in Asian equities. Nevertheless, the daily chart shows that the benchmark bounced strongly after testing its 200 DMA, while technical indicators continue advancing modestly within positive territory. In the 4 hours chart, technical readings present a neutral stance, as indicators hold flat within neutral territory, while the index is currently developing a few points above a horizontal 20 SMA. 

Support levels: 16,915 16,860 16,792

Resistance levels: 17,021 17,083 17,153

Gold

Gold prices started the day with a positive tone, supported by Chinese trade balance data, showing an unexpected gain in the country's imports, as China is the world's second largest buyer of the metal, behind India. Still, dollar's demand over the past American afternoon sent the commodity lower for a second consecutive day, with spot trading around $1,337.00 a troy ounce. Technically, the daily chart presents a neutral stance, as  indicators have lost upward strength and settled around their mid-lines, whilst the price remains barely above the critical support area around 1,330.00/1,335.00, where the bright metal presents multiple intraday highs and lows, and a Fibonacci support. In the same chart, the 100 DMA maintains a sharp bullish slope, now around 1,308.00. In the 4 hours chart, however, the risk is towards the downside, with the price now below a bullish 20 SMA, and indicators retreating strongly from overbought levels, supporting some additional declines on a break below 1,333.50. 

Support levels: 1,333.50 1,324.80 1,308.00

Resistance levels: 1,353.50 1,364.30 1,375.11 

WTI Crude Oil

Oil prices soared on the back of US stockpiles report, showing one of the largest draw-downs on record. West Texas Intermediate crude oil futures advanced up to $47.73 a barrel and held nearby by the end of the end, after the Energy Information Administration reported that commercial crude oil inventories fell by 14.5 million barrel. Gasoline stocks fell by 4.2 million barrels, against a 625K decline expected. Late Wednesday, the API report pre-announced this result by informing a 12.08M barrel slump. The news have taken out some of the pressure over an oversupply market, the main reason behind the intraday advance. From a technical point of view, the daily chart shows that  the price is back above its 20 and 100 SMAs, both still flat and converging around 47.20, while technical indicators have extended their upward slopes, and are currently entering bullish territory. In the 4 hours chart, the commodity stands above all of its moving averages while technical indicators are losing upward strength within overbought territory, but remain far from suggesting  the rally is exhausted. 

Support levels: 47.20 46.60 45.90 

Resistance levels: 47.70 48.45 49.20