The week started with the greenback extending its Trump's inaugural speech triggered sell-off,

EUR/USD

The week started with the greenback extending its Trump's inaugural speech triggered sell-off, and the EUR/USD pair rallying to a fresh 7-week high of 1.0754, and closing the day not far below it, despite the absence of macroeconomic leads. The calendar was extremely light both shores of the Atlantic, with only one relevant release, the EU January preliminary Consumer Confidence index, which increased from -5.1to -4.9 in January, the highest reading since April 2015. This Tuesday, things will be more interesting from the fundamental point of view, with the release of the EU preliminary January PMIs, US manufacturing PMI and latest Existing Home Sales among others.

Technically, the pair has extended its advance beyond the 38.2% retracement of its November/January decline at 1.0710, and reached a fresh 7-week high, confirming bull's dominance. A pullback towards the mentioned level early US session was quickly reverted, although there was no follow-through beyond the mentioned high. In the 4 hour chart, the Momentum indicator heads north well above its mid-line, the RSI indicator consolidates around 57, whilst the 20 SMA maintains its bullish slope below the mentioned Fibonacci support, all of which favors a new leg higher, particularly on an extension beyond the mentioned daily high, which can lead to a test of the critical 1.0800 figure.

Support levels: 1.0700 1.0660 1.0610

Resistance levels: 1.0755 1.0800 1.0840

USD/JPY

The Japanese yen was among the best performers this Monday, soaring against the greenback by over 1.2%, with the USD/JPY pair falling down to 112.75, before finally being to bounce modestly. Falling stocks and government yields across the world, fueled demand for the safe-haven currency, after US President Trump's first words pointed for economic protectionist policies, while this Monday, the White House announced its intentions to withdraw the US from the Trans Pacific Partnership free trade agreement that has yet to be ratified. Many times in the past, Japan's PM Shinzo Abe, has said that without the US participation the pact would become "meaningless."  Trading a few pips above the 113.00 level by the end of the day, the USD/JPY pair 4 hours chart shows that the Momentum indicator maintains its sharp bearish slope, now nearing oversold territory, whilst the RSI indicator consolidates around 38, maintaining the risk towards the downside. In the same chart, the 100 SMA has extended its decline after crossing below the 200 SMA, both far above the current level, another sign of bears' strength. The monthly low set last week at 112.56 is the level to follow, as a break below should result in a steeper decline towards the 100.00 region. 

Support levels: 112.90 112.55 112.10

Resistance levels: 113.40 113.90 114.20 

GBP/USD

The Sterling opened the week on a solid footing, extending its latest gains and among the most benefited from dollar's sell-off at the beginning of the Trump era. The GBP/USD pair traded as high as 1.2495 in the US afternoon, settling not far below the level, as investors wait for the Supreme Court ruling on the Parliament's right to vote to trigger the official start of negotiations to exit the EU, this Tuesday. The absence of macroeconomic releases could have helped the Pound rally, ahead of critical events, as beyond the court ruling, the Markit preliminary Manufacturing PMI for January will also be out on Tuesday. The pair is poised to extend its advance from a technical point of view, given that is pressuring the 1.2500/10 region, a strong static resistance that if broken, could lead to an extension up to 1.2774, December monthly high, particularly if the dollar remains in sell-off mode. In the 4 hours chart, the price continued advancing above a bullish 20 SMA, which crossed above the 200 EMA for the first time in over a month, reflecting bull's strength. In the same chart, the Momentum indicator keeps heading north at fresh 1-week highs, whilst the RSI indicator has pared gains, but holds near overbought readings, maintaining the risk towards the upside as long as the price holds above the 1.2415 support. 

Support levels:  1.2450 1.2415 1.2370 

Resistance levels: 1.2510 1.2560 1.2600

AUD/USD

The AUD/USD pair trimmed its daily gains and closed the day a handful of pips above Friday's close, after flirting with the recent multi-month high of 0.7588. Higher commodities' prices underpinned the Aussie, with most base metals up this Monday, although the negative tone of equities limited the advance. There won't be any relevant macroeconomic releases in Australia until next Wednesday when the country will release its latest quarterly inflation figures. Despite the pair failed to break above previous high, the positive tone persists, although losing momentum, given that in the 4 hours chart, the price is steadily meeting buying interest around a horizontal 20 SMA, around 0.7530, whilst technical indicators have turned modestly lower, but still remain within positive territory. As commented on previous updates, the pair needs now to surpass the 0.7600 level to be able to extend its gains towards the 0.7700 region, and beyond, should upcoming inflation readings surpass market's expectations. 

Support levels: 0.7525 0.7490 0.7450 

Resistance levels: 0.7600 0.7640 0.7690

Dow Jones

Wall Street closed in the red, with the Dow Jones Industrial Average down 27 points or 0.14%, to end the day at 19,799.85. The Nasdaq Composite closed 2 points lower at 5,552.94, while the Nasdaq Composite settled at 2,265.20, down by 0.27%. There were no major macroeconomic announcements to motivate investors, albeit US President Donald Trump comments about upcoming protectionist policies weighed on market's mood. Within the Dow, Home Depot was the best performer, adding 1.80%, whilst General Electric led losers' list, down by 2.60%. Exxon was also among the worst performers as oil prices retreated, shedding 1.03%. Daily basis, the index held within its Friday's range, unable to recover ground beyond a horizontal 20 DMA and with technical indicators maintaining their modest bearish slopes within bearish territory. In the 4 hours chart, the index met selling interest on an early approach to its 200 SMA, now holding above a bearish 20 SMA and with technical indicators bouncing from their mid-lines, indicating that selling interest is limited, despite the ongoing retracement from record highs. 

Support levels: 19,769 19,704 19,676    

Resistance levels: 19,862 19,918 20,000 

FTSE 100

The FTSE 100 continued retreating from record highs this Monday, closing  the day 47 points lower at 7,151.18. The London benchmark opened sharply lower, falling to a fresh 2017 low of 7,130 before recovering some. A stronger Pound put the benchmark under pressure, although losses were limited by a strong advance in the mining-related sector. Antofagasta was the best performer, up by 3.61%, followed by Fresnillo that added 3.42%. Banks fell, with Royal Bank of Scotland shedding 2.26%. The biggest decliner, however, was bookmaker Paddy Power Betfair, down by 4.38%. The index closed the day below its 20 DMA for the first time in over a month, whilst technical indicators head sharply lower around their mid-lines, ready to break below them. In the 4 hours chart, the technical outlook favors additional declines, as the index remains below a clearly bearish 20 SMA, whilst technical indicators turned flat within neutral territory after bouncing from oversold readings. 

Support levels: 7,130 7,085 7,025 

Resistance levels: 7,199 7,241 7,288 

DAX

The DAX closed the day at 11,545.75, down by 84 points or 0.73%, with all European major indexes closing in the red amid a decline in banks´ shares and as oil prices fell, dragging lower the energy-related sector. Within the German benchmark, the pharmaceutical sector also fell, amid increasing concerns about upcoming Trump policies. Commerzbank was the worst performer, down by 1.87%, followed by Merck that shed 1.19% and Linde, which closed 1.14% lower. Volkswagen on the other hand led gainers' list, up by 3.60%. The index closed the day a few points above a flat 20 DMA, holding within its latest December range, and with daily indicators presenting modest downward slopes, but still within positive territory, not enough to confirm a steeper decline ahead. In the 4 hours chart, indicators remain stuck around their mid-lines, whilst the index continues moving back and forth around a horizontal 20 SMA, maintaining the neutral stance seen on previous updates. 

Support levels: 11,554 11,490 11,440 

Resistance levels: 11,629 11,694 11,740

Nikkei

The Nikkei tumbled at the beginning of the week, down 24 points or 1.29%, to close at 18,891.03 with a stronger yen driving export-oriented equities sharply lower, also weighed by Trump's protectionist stance, and the announced plans to pull the US from the TPP free trade deal. Financials and automakers were among the worst performers, with Sompo Holdings topping losers' list, down 3.35%, and Yamaha shedding 2.75%. Toshiba rose sharply on reports  the Japanese electronics-to-nuclear conglomerate is attracting interest for investments in its semiconductor business that it plans to spin off, ending the day up 9.0%. The index fell further following Wall Street's poor performance, now poised to open the day marginally lower. From a technical point of view, the risk remains towards the downside, given that in the daily chart, the index fell further below a bearish 20 DMA, whilst technical indicators extended their declines within negative territory. In the 4 hours chart, the Nikkei is also biased lower, developing below all of its moving averages, whilst technical indicators also maintain their bearish slopes within negative territory, supporting another leg lower for this Tuesday. 

Support levels: 18,842 18,790 18.723 

Resistance levels: 18,930 18,992 19,060

Gold

Spot gold reached a fresh 2-month high of 1,219.43 this Monday, closing the day around $1,216.30 a troy ounce, as uncertainty surrounding US policies fuel demand for the safe-haven asset, and hit the greenback. There were no other major developments around gold, although the latest COT report shows that longs have increased for a second consecutive week, somehow supporting some further gains ahead. From a technical point of view, the daily chart shows that the price is currently around a sharply bearish 100 DMA, having briefly advanced beyond it intraday, whilst technical indicators have resumed their advances after a modest downward correction from overbought readings, supporting some additional gains on a break beyond the mentioned high. Shorter term, the 4 hours chart shows that the price bounced quickly after falling down towards a flat 20 SMA at 1,207.90, whilst the Momentum indicator heads north at fresh weekly highs and the RSI indicator consolidates around 58, in line with the longer term perspective. 

Support levels: 1,207.90 1,195.80 1,182.90    

Resistance levels:  1,219.50 1,229.90 1,241.35 

WTI Crude Oil

Crude oil prices were unable to advance, despite the positive comments coming from the OPEC on output cut compliance, with West Texas Intermediate crude oil futures down on the day, amid signs on rising production in the US last Friday, news shown that US drillers added the most rigs  weekly basis in nearly four years, with US production up by more than 6% since mid 2016. WTI fell down to 52.21, but settled at $52.75 a barrel. Daily basis, oil is currently a few cents below a bearish 20 DMA, but still far above the 100 and 200 SMAs, whilst technical indicators have turned modestly bearish within neutral territory, with not enough strength to confirm additional declines. In the 4 hours chart,  the price is struggling within a congestion of moving averages, which clearly reflects the absence of clear directional strength. Technical indicators in this last chart present  shy bullish slopes, but also stuck around neutral territory, giving no clear on clues on what's next. 

Support levels: 52.10 51.50 50.90    

Resistance levels: 53.65 54.30 55.00