The American dollar edged marginally lower in the US afternoon

EUR/USD

The American dollar edged marginally lower in the US afternoon, as local share markets traded in a moderated fashion, with Wall Street hovering around its daily opening for most of the day. The market remains in wait-and-see mode ahead of the upcoming economic policy decisions from some major Central Banks, starting this Thursday with the BOE, and ending next week with the FED and the BOJ. There were some minor releases in Europe, including August CPI for Italy and French, which remained steady at low levels, in line with the deflationary levels seen in the region. The EU as a whole, also released its Industrial Production data for July, which fell by 1.1%, missing expectations of a 0.9% decline, and leaving the year-on-year reading at -0.5%. In the US, with the MBA mortgage approvals were up to 4.2% from previous 0.9%,  whilst the August export price index came in at -2.4%, in line with expectations, but the import price index fell by 0.02%. 

The EUR/USD pair picked up momentum and climbed to 1.1273, surpassing its previous weekly high by a couple of pips before retreating to the current 1.1250 region.  There has been no major progress from a technical point of view, given that the price remains stuck within Friday's range, and in the 4 hours chart, the price is now above its moving averages that anyway remain all together in a tight 20 pips range, a clear indication of the absence of directional strength. In the same chart, technical indicators head higher above their mid-lines, but the movement has been too shallow to be enough to confirm the rally will extend during the upcoming hours. A daily descendant trend line coming from this year high at 1.1615, stands this Thursday around 1.1300, the level to break to see the pair gaining some additional ground towards 1.1366, August monthly high.  

Support levels: 1.1200 1.1160 1.1120 

Resistance levels: 1.1300 1.1335 1.1370

USD/JPY

Having traded as high as 103.35, the USD/JPY pair closed the day modestly lower in the 102.30 region, undermined by dollar's weakness. The pair started the day advancing, on continued rumors coming from Japan over the possible measures to be adopted by the BOJ next week, including cutting rates further into negative territory and accelerating the pace of JGB purchases. The  pair is now flat weekly basis, not actually a surprise considering that both Central Banks are expected to make some interesting announcements next week. In the meantime, the short term picture for the pair is bearish, as in the 1 hour chart, the price is pressuring a modestly bullish 100 SMA, while technical indicators have resumed their declines within bearish territory after a brief period of consolidation. In the 4 hours chart, the price is a handful of pips above a still bullish 100 SMA, around 102.10, the Momentum indicator presents a modest bullish slope above its 100 line, while the RSI indicator heads south around 48, suggesting that a break below the mentioned level should result in a stepper decline this Thursday. 

Support levels: 102.10 101.65 101.20

Resistance levels: 102.50 102.90 103.35 

GBP/USD

The GBP/USD pair extended its decline down to 1.3138, a fresh 2-week low, as mixed employment data, prompted further profit taking ahead of the BOE's economic policy meeting this Thursday. The unemployment rate remained steady at 4.9 in the three months to July,  while in the same period, the number of people at work increased by 174K, up to 31.77 million. Part-time employment rose by 126K, while wages ticked modestly lower, as total income resulted at 2.3%YoY against previous 2.5%, whist the average earnings excluding bonus resulted at 2.1% against previous 2.3%. The pair, however, bounced sharply in the US afternoon, amid broad dollar's weakness, presenting now a bullish stance for the short term. In the 1 hour chart, the price has accelerated above its 20 SMA that anyway remains flat around 1.3190, while technical indicators entered positive territory, maintaining their bullish slopes. In the 4 hours chart, the recovery stalled around the 200 EMA at 1.3235, while the 20 SMA maintains its bearish slope above this last, suggesting that further gains are not yet confirmed. In the same chart, technical indicators have recovered within negative territory, but remain below their mid-lines, also indicating that the upward potential remains limited. 

Support levels: 1.3190 1.3150 1.3110 

Resistance levels: 1.3235 1.3280 1.3320 

AUD/USD

The AUD/USD pair staged a minor recovery this Wednesday after falling down to 0.7441 late Wednesday, but pared gains below the 0.7500 level, maintaining a negative bias ahead of a new day opening. The Aussie has turned increasingly bearish ever since failing to regain its upward trend earlier this month, when it briefly advanced beyond the 0.7700 level. Australia will release August employment data during the upcoming Asian session, with employment expected to have added 15.0K new jobs in the month, and the unemployment rate foresee at 5.7%, unchanged from July. Worse-than-expected numbers should fuel the decline of the antipodean currency, putting price one step closer to the critical 0.7250 long term support. Shorter term, the 1 hour chart shows that the technical outlook turned neutral, as the price is hovering around a horizontal 20 SMA, whilst indicators head nowhere around their mid-lines. In the 4 hours chart, the Momentum indicator recovered ground within bearish territory, but the price remains well below a strongly bearish 20 SMA whilst the RSI indicator consolidates near oversold territory, maintaining the risk towards the downside. 

Support levels: 0.7450 0.7420 0.7380 

Resistance levels: 0.7490 0.7530 0.7565

Dow Jones

US indexes closed mixed this Wednesday, but not far from their daily opening levels, with the DJIA and the S&P dragged lower by falling oil prices. The DJIA lost roughly 32 points to end at 18,034.77, while the S&P shed 1 point, to 2,125.77. The Nasdaq Composite on the other hand, added 18 points, and closed the day at 5,173.77, as Apple shares rallied over 3.5%. The Dow's daily chart shows that the index trimmed all of its weekly gains, and that an early advance met selling interest around the 100 DMA, while indicators have resumed their declines within bearish territory, supporting a continued decline, particularly as the Momentum indicator stands at fresh monthly lows. In the shorter term, and according to the 4 hours chart, the index is also biased lower, as the 20 SMA contained intraday rallies, now offering a dynamic resistance around 18,103, while technical indicators have turned sharply lower maintaining their bearish slopes after entering negative territory. 

Support levels: 17,976 17,920 17,871

Resistance levels: 18,103 18,147 18,192 

FTSE 100

The FTSE 100 ended this Wednesday marginally higher, up by 7 points at 6,673.31. A not so bad employment report restored partially investors' confidence, while a recovery in base metals' prices helped the mining sector to close higher. Glencore was the best performer of the sector, up 2.49% while Anglo American added 2.53%. Among banks, HSBC managed to close the day up 0.3% after suffering a rating downgrade to neutral from buy at UBS. From a technical point of view, the daily chart shows that the benchmark continues pressuring its recent lows, while the 20 SMA heads lower above the current level and technical indicators hold within negative territory, all of which indicate that the risk remains towards the downside. In the 4 hours chart, the 20 SMA maintains a sharp bearish slope well above the current level, having already crossed below the 200 SMA, while the RSI indicator heads lower around 36, also supporting some further slides on a break below the weekly low, also the immediate support, at 6,646.

Support levels: 6,646 6,584 6,530

Resistance levels: 6,693 6,740 6,785

DAX

The German DAX closed 8 points lower at 10,378.40. The local Bayer AG edged 0.55% higher after announcing it has reached an agreement to acquire Monsanto Co. for about $56 billion, whilst local banks closed lower, following Asian lead. Deutsche bank closed 1.00% lower while Commerzbank closed down by 0.90%. The index daily chart shows that it stands around Tuesday's low ahead of Asian opening, with technical readings still favoring some further declines, as the 20 SMA continues gaining bearish strength above the current level, whilst the RSI indicator heads south around 41. In the 4 hours chart, the bearish potential is even stronger, as after breaking below the 20 and 100 SMAs late last week, the benchmark is currently extending below its 200 SMA for the first time  since early July. In this last time frame, technical indicators lack clear directional strength, but remain near oversold levels, also supporting some further slides ahead. 

Support levels: 10,320 10,275 10,212

Resistance levels: 10,395 10,447 10,490 

Nikkei

The Nikkei 225 closed at 16,614.24, down by 114 points or 0.69%, as bank-related equities plunged on speculation that the BOJ will cut interest rates further into negative territory. Adding to the negative mood among local investors was the continued pressure over US equities. Nippon Kayaku Co. led decliners  with a loss of 5.84%, while several electronics manufacturers closed over 3.0% lower, including names such as Pioneer, and Casio. The index closed sharply lower for a second consecutive day and is biased lower according to the technical readings in the daily chart, as the RSI indicator accelerated its decline around 41, whilst the benchmark fell further below its 20 and 200 DMAs. The 100 DMA in the mentioned time frame stands at 16,401, providing an immediate support. In the 4 hours chart, technical readings also support a bearish continuation, as the 20 SMA accelerated its decline above the current level, while the Momentum indicator heads south within negative territory and the RSI hovers around 30, with no aims of turning higher. 

Support levels: 16,401 16,347 16,292

Resistance levels: 16,512 16,579 16,668

Gold

Spot gold recovered from a daily low of $1,313.72 a troy ounce to close the day some $10 above this last, helped by renewed dollar weakness during US trading hours. Despite closing in the green, the intraday recovered stalled below Tuesday's opening and below a modestly bearish 20 DMA, currently around 1,326.00, while technical indicators, in the daily chart, hover directionless within neutral territory, limiting chances of a steeper recovery during the upcoming sessions. To recover its shine, spot gold would need to recover beyond the 1,333/5.00 region. Shorter term, and according to the 4 hours chart, the upward potential is also limited, as the price is still below its 20 and 100 SMAs, both around the daily high of 1,325.91, while indicators have recovered from oversold readings up to their mid-lines, but remain below them.  

Support levels: 1,315.65 1,302.45 1,296.85

Resistance levels: 1,326.10 1,333.90 1,342.50 

WTI Crude Oil

Crude oil prices plummeted, despite inventories, according to the EIA, fell by 559,000 barrels in the week ending September 9th, but the report also added that inventories of distillates rose by 4.6 million barrels and that they remain at unseasonably high levels. The API report released late Tuesday estimated that oil inventories had added 1.4 million barrels. West Texas Intermediate crude oil prices initially advanced with the headline, but quickly reversed course and plunged to a fresh 2-week low of $43.40 a barrel. Holding a handful of cents above this last, the daily chart presents a strong bearish tone, as the price fell further below a clearly bearish 20 SMA, whilst technical indicators accelerated their declines within negative territory. In the 4 hours chart, the price has extended well below its moving averages, while technical indicators also head south within their mid-lines, in line with the longer term outlook. The immediate support comes at 43.00, the 61.8% retracement of the bullish run seen early August, with a break below it opening doors for a continued decline down to the 40.00 region.  

Support levels: 43.00 42.50 41.90 

Resistance levels: 44.20 44.80 45.50