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The EUR/USD pair advanced up to 1.0499 this Thursday

23rd December 2016

EUR/USD

The EUR/USD pair advanced up to 1.0499 this Thursday, but quickly retreated from the level to settle around 1.0440, marginally higher for a second consecutive day. There were multiple macroeconomic releases in the US, with the most encouraging being US Q3 GDP, revised higher from 3.3% to 3.5% annualized, indicating a faster pace of growth in the world's largest economy. Not that encouraging, Durable goods orders fell 4.6% in November, better than the expected 4.7% decline, whilst the core reading excluding aircraft, rose 0.9% following a 0.2% gain in October.

The spike in the pair, however,  was triggered by weaker-than-expected US income and expending data. Personal spending rose 0.2% in November versus 0.3% expected while incomes were essentially unchanged in the same period, against 0.3% expected. Meanwhile, the personal consumption expenditures (PCE) price index, the Fed’s preferred gauge of inflation, was unchanged in November, after a 0.3% monthly increase in October and a 1.4% when compared to a year earlier. 

From a technical point of view, the pair is still poised to fall further, given that the pair retraced sharply after testing the mentioned the daily high, and ends the day not far from its daily low of 1.0425. The price is above a mildly bearish 20 SMA, in the 4 hours chart, while technical indicators in the same chart have lost upward strength and begin turning south with the RSI currently breaking below its 50 level. Short term buyers have been surging around 1.0420, the immediate support, although a break below 1.0390 is required to confirm a retest of the year low in the 1.0350 region. 

Support levels: 1.0420 1.0390 1.0350 

Resistance levels: 1.0460 1.0500 1.0545

USD/JPY

The USD/JPY pair closed the day unchanged in the 117.60 region, confined to a tight 60 pips day ever since the day started. Mixed US data and choppy trading around worldwide stocks failed to motivate investors around the pair. Japanese markets will remain closed this Friday, due to The Emperor's Birthday bank holiday, with further range trading expected for this last day of the week. Technically, the daily chart shows that the price has been developing within a small wedge, usually a consolidation figure that precedes a continuation of the previous trend, in this case bullish. Still, investors will likely remain side-lined next week. Shorter term and according to the 4 hours chart, the pair is clearly neutral, with indicators hovering around their mid-lines, but the price well above a bullish 100 SMA, at 115.60, whilst the 200 SMA also maintains its bullish slope far below the shorter. Support levels: 117.10 116.55 116.10 Resistance levels: 117.90 118.30 118.65

GBP/USD

The GBP/USD pair fell below the 1.2300 threshold for the first time in over a month, ending the day not far from the daily low achieved in the US afternoon at 1.2279. Better-than-expected US Q3 GDP and Durable Goods Orders data released early US session put the pair under selling pressure, with the Pound further weighed by Brexit woes. Reports that a UK-EU trade deal, once the UK leaves the union, could be easily vetoed by any EU member state, dented further hopes for a softer Brexit. Technically, the 4 hours chart shows that the 20 SMA continues capping the upside, currently at 1.2360, while the RSI indicator holds steady around 28, and the Momentum consolidates below its 100 level, maintaining the risk towards the downside. The immediate support comes now at 1.2250, with scope to extend its slide towards the 1.2200 region, once below it this Friday. 

Support levels: 1.2250 1.2210 1.2170

Resistance levels: 1.2330 1.2385 1.2420

AUD/USD

The AUD/USD pair fell to a fresh 6-month low of 0.7194 this Thursday, with a sharp intraday decline in base metal weighing on the Aussie. Copper fell to its lowest in over a month this Thursday, although it trimmed its daily losses ahead of the close. Iron ore prices also fell, down to $76 per tonne. There are no economic releases scheduled in Australia for this upcoming Asian session, and with Japan on holidays, the AUD/USD pair will likely remain confined to a tight range. From a technical point of view, the price is hovering around the 61.8% retracement of this year's early rally, a major Fibonacci resistance. Mid May, the pair challenged this region for the first time, falling as low as 0.7144 before recovering sharply near the 0.7800 region, making of such low the key support for this upcoming days, as a break below it should see the slide extending towards the critical 0.7000 figure. In the 4 hours chart, the technical outlook is bearish, as the price continued developing below a bearish 20 SMA, currently around 0.7240, while the Momentum indicator lacks directional strength within bearish territory, but the RSI turned lower after a modest upward correction, currently at 32, anticipating some further slides for this Friday. 

Support: levels: 0.7175 0.7140 0.7100

Resistance levels: 0.7240 0.7290 0.7330 

Dow Jones

Wall Street closed marginally lower in dull trading, as the market entered holiday's mood. The Dow Jones Industrial Average shed 23 points, and settled at 19,918.88, while the Nasdaq Composite ended at 5,447.42, 0.44% lower. The S&P lost 4 points, or 0.19%, to end at 2,260.96. News that the US economy grew by more than initially estimated during the third quarter of the year, were neutralized by poor employment and inflation headlines. Retailers were among the worst performers, and within the Dow, Wall-Mart led decliners, down by 2.32%, followed by Home Depot that lost 1.02%. The daily chart for the DJIA shows that the benchmark holds well above a bullish 20 DMA, whilst technical indicators continue to lose upward strength, but hold within overbought territory. In the 4 hours chart, the neutral technical stance persists, with the benchmark stuck around a horizontal 20 SMA and indicators heading nowhere around their mid-lines. 

Support levels: 19,884 19,823 19,746    

Resistance levels: 19,955 20,000 20,040 

FTSE 100

The FTSE 100 added 22 points to end the day at 7,063.68, its highest settlement in almost two months, underpinned by a weaker Pound. Gains, however, were limited by weak metals´ prices, which put the mining sector under pressure. Also, a fresh weekly low in oil sent energy-related equities lower. BHP Billiton was the worst performer, down by 1.63%, followed by Rio Tinto that shed 0.985 and Anglo American which closed down 0.75%. The best performer was the business consultant group DCC, which rose 3.58%. In the daily chart, technical indicators have extended their advances within positive territory, whilst the 20 DMA is crossing above the 100 DMA well below the current level, supporting some further gains for these last days' of the year. In the 4 hours chart, the Momentum indicator has turned flat around its 100 level, reflecting the lack of volume rather than upward exhaustion, as the index bounced from a still bullish 20 SMA, currently at 7,033, while the RSI indicator turned lower, now around 61, with limited downward strength. 

Support levels: 7,033 7,000 9,972

Resistance levels: 7,080 7,136 7,175

DAX

The German DAX fell 12 points this Thursday, ending the day at 11,456.10, with most European equities closing modestly lower. Most of the DAX component closed in the red, with auto makers and banks down. The best performer was  Fresenius Medical Care that added 0.89%. The German benchmark, however, holds at its highest for this 2016, having entered a consolidative stage that will likely persists for the next couple of weeks. From a technical point of view, the risk remains towards the upside, as in the daily chart, technical indicators have barely lost upward within overbought territory, whilst the index continues developing far above a bullish 20 DMA, currently at 11,035. In the shorter term, and according to the 4 hours chart, the index remains above its 20 SMA, the Momentum indicator has turned flat around its 100 level, whilst the RSI indicator heads modestly lower around 64. 

Support levels: 11,415 11,373 11,338

Resistance levels:  11,484 11,520 11,566

Nikkei

Asian markets were extremely quiet this Thursday, with the absence of macroeconomic news exacerbating thin holiday's trading. The Nikkei 225 closed at 19,427.67, down by 16 points or 0.09%, and will remain closed this Friday, amid a local bank holiday due to the Emperor's birthday. The benchmark  fell intraday to a fresh weekly low of 19,307, but quickly recovered 100 points, indicating that sentiment remains strong and that investors are still willing to buy the dips. Daily basis, the Momentum indicator continues consolidating within positive territory, while the RSI retreated from extreme overbought readings and turned flat around 70, whilst the 20 DMA maintains a sharp bullish slope well below the current level, supporting the dominant bullish trend. In the 4 hours chart, the index has been trading a few points below a horizontal 20 SMA, while technical indicators consolidate in neutral territory, a consequence of the limited intraday volume seen these days. 

Support levels: 19,362 19,307 19,260

Resistance levels: 19,487 19,542 19,590

Gold

Gold prices edged marginally lower this Thursday, with spot ending the day at $1,128.41 a troy ounce, undermined by persistent dollar's strength. Adding to the negative tone of the bright metal was subdued demand from jewelers and retailers in India, the world's largest consumer of gold. The technical perspective remains unchanged, with the risk clearly towards the downside, given that in the daily chart, the price has set a lower low and a lower high, whilst the RSI indicator has retreated after failing to reenter above 30, and heads south around 25. In the shorter term, the 4 hours chart  presents a technical neutral stance, with the price being capped by a horizontal 20 SMA and technical indicators heading nowhere within negative territory. The yearly low comes at 1,061.78, a probable bearish target on a break below the 1,100.00 mark. 

Support levels: 1,122.60 1,114.80 1,094.30    

Resistance levels: 1,133.50 1,142.50 1,151.20

WTI Crude Oil

Crude oil prices closed marginally higher after falling to fresh weekly lows, with West Texas Intermediate crude oil futures recovering from 52.05 to settle at $52.73 a barrel. The black gold fell during the past Asian session, undermined by a surprise increase in US stockpiles, but recovered ground, as dollar's gains remained subdued. Additionally, is no coincidence that the commodity surged from the 52.00 level, a major static resistance that contained the upside for most of the second half of this 2016. Technically, however, US oil seems to be losing upward momentum, as after retreating from overbought territory, technical indicators have turned flat right above their mid-lines. Also, the price bounced after testing a sharply bullish 20 DMA, still the main support. In the 4 hours chart, the commodity has met buying interest around a bullish 100 SMA, but is now trading below a horizontal 20 SMA whilst technical indicators head lower within negative territory, supporting a downward move for this Friday.  

Support levels: 52.10 51.60 51.10    

Resistance levels: 53.10 53.65 54.20

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.