Daily market review by HY Markets

Commercial Content Analysts
691

GOLD
Gold reached fresh 2year highs on Wednesday as investors’ appeal for safehavens increased amid lingering political and economic uncertainty in the aftermath of the Brexit vote. Gold broke above previous 2016 high of $1,358.40 a troy ounce ounce and reached its highest level since March 2014 at $1,375.10/oz during the New York session, although it retreated slightly from it. The yellow metal has benefitted from the riskoff environment and prospects major central banks BoE, BoJ might provide further monetary stimulus over the upcoming months, while the Fed could delay next rate hike on the back of UK referendum. In the daily chart, the technical picture remains bullish, although a phase of consolidation might precede another leg higher given that indicators are in overbought territory. In 4 hours chart, the outlook is also positive, with RSI having already corrected extreme conditions and turned flat nearby. A clear break above $1,375 would pave the way towards the $1,388 area enroute to $1,400.

Support levels: 1,358.40 1,335.56 1,320.56

Resistance levels:1,388.45 1,400.00 1,416.34

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692

GBP/USD
The British Pound closed the week at 1.2944 against the greenback, not far from the 31year low set at 1.2793 earlier this past week, and with the pair still meeting selling interest on attempts to advance beyond the 1.3000 level. The main focus is now in the upcoming Bank of England meeting this Thursday, as the Central Bank is expected to cut the bank rate by 25 bps, and add more easing in the August meeting. The pair has found a temporal floor, having spent the last few days in consolidative mode, although the risk remains towards the downside. Technically, the daily chart shows that the Momentum indicator keeps grinding lower within oversold territory, while the RSI indicator consolidates below 30. In the same chart, the price is far below a bearish 20 SMA, still unable to catch up with price, all of which reflects the negative sentiment towards the UK currency. Shorter term, and according to the 4 hours chart, the pair presents a neutral stance as the price is stuck around a bearish 20 SMA, whilst the Momentum indicator hovers around its modline and the RSI indicator heads modestly lower around 41, supporting a downward extension on a break below 1.2895, the immediate support.

Support levels: 1.2895 1.2840 1.2790

Resistance levels: 1.2980 1.3030 1.3060

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693

GBP/USD
The British Pound closed the week at 1.2944 against the greenback, not far from the 31year low set at 1.2793 earlier this past week, and with the pair still meeting selling interest on attempts to advance beyond the 1.3000 level. The main focus is now in the upcoming Bank of England meeting this Thursday, as the Central Bank is expected to cut the bank rate by 25 bps, and add more easing in the August meeting. The pair has found a temporal floor, having spent the last few days in consolidative mode, although the risk remains towards the downside. Technically, the daily chart shows that the Momentum indicator keeps grinding lower within oversold territory, while the RSI indicator consolidates below 30. In the same chart, the price is far below a bearish 20 SMA, still unable to catch up with price, all of which reflects the negative sentiment towards the UK currency. Shorter term, and according to the 4 hours chart, the pair presents a neutral stance as the price is stuck around a bearish 20 SMA, whilst the Momentum indicator hovers around its modline and the RSI indicator heads modestly lower around 41, supporting a downward extension on a break below 1.2895, the immediate support.

Support levels: 1.2895 1.2840 1.2790

Resistance levels: 1.2980 1.3030 1.3060

See more analysis at Market Commentary | HY Markets

694

EUR/USD
Risk sentiment improved with the weekly opening, with stocks soaring and the dollar benefiting from the latest US employment report, much better than expected. US bond yields recovered from record lows, further supporting risk appetite. The macroeconomic calendar was quite scarce, but political news lead the way: in the UK, Theresa May has been chosen as the new leader of the Conservative Party and UK prime minister, with David Cameron announcing he will step down next Wednesday after attending the House of Commons for Prime Minister’s Questions. In Japan, Abe won the elections getting 77 out of the 78 seats needed for a twothirds majority, enough to implement a constitutional reform and implement further stimulus measures. With no relevant news coming from Europe, the common currency moved back and forth around its Friday’s close, ending the day pretty much unchanged around 1.1050 against the greenback. The overall technical stance is bearish, but the absence of a clear catalyst and the limited intraday range, have left technical readings in the 4 hours chart neutral. Nevertheless, the price has remained unable to advance beyond its 20 SMA, currently around 1.1065, whilst the technical indicators hold within negative territory, limiting chances of a steeper recovery. If market sentiment remains positive the pair may recover further although selling interest will likely surge on advances beyond the 1.1100 region.

Support levels: 1.1005 1.0960 1.0920

Resistance levels: 1.1065 1.1100 1.1145

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695

EUR/USD
Despite risk sentiment continued to improve, the common currency was unable to gain ground, ending the day merely 20 pips higher in the 1.1070 region. Stocks skyrocketed, with Wall Street hitting fresh record highs, the JPY plummeted amid speculation Abe will announce a new round of fiscal and monetary stimulus, whilst the Pound advanced two big figures, on a first glimpse of political certainty in the UK. In Europe, data came from Germany, with consumer prices in the country up by 0.3% in June compared to a year later, modestly higher for a second consecutive month. Monthly basis, inflation rose by 0.1% in line with market’s expectations, and hardly signaling an improvement in the country. In the US, the Index of Small Business Optimism increased 0.7 points to 94.5, still well below the 40 year average of 98, but the third monthly gain in a row, whilst JOLTS job openings fell in May, resulting in 5.5 million, down from 5.79 million in April. The EUR/USD pair advanced up to 1.1125 early London, fueled by market’s positive mood, but was unable to sustain gains above the 1.1100 figure, quickly retreating below it. The common currency faltered amid little confidence in the European economic health, as off lately, data has been quite disappointing pointing for a continued slowdown. Technically, the 4 hours chart shows that the rally stalled right below a bearish 100 SMA, and now holds a few pips above a horizontal 20 SMA, whilst the technical indicators continue to lack directional strength around their midlines. The risk remains towards the downside, although a clear break below the 1.1000 figure is required to confirm further declines, with speculative interest then, looking to retest postBrexit lows around 1.0910.

Support levels: 11050 1.1000 1.0960

Resistance levels: 1.1125 1.1155 1.1190

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696

EUR/USD
Save havens dollar and yen took a breath during the first half of the day, recovering modestly across the board as, despite equities in Asia and Europe continue to move higher, the momentum decelerated. The EUR/USD pair managed to rally up to 1.1119 after Wall Street’s opening, but failed to extend its gains, hovering around the 1.1100 figure by the end of the day. There were little relevant macroeconomic data both shores of the Atlantic, although EU industrial production declined by 1.2% MoM in May, whist April reading was upwardly revised to 1.4%. In May, and compared to a year before, production rose by 0.5%, below market’s expectations. Considering latest German data, also disappointing in the industrial and manufacturing sector, the readings are a clear indication that the region is struggling with economic growth. In the US, import prices rose 0.2% in June, after rising 1.4% in May, while export prices surged by 0.8% following a 1.2% advance in May. From a technical point of view, the EUR/USD pair continues to show little progress, trapped within a clear range between 1.1000 and 1.1180 for a third consecutive week. Investors have turned extremely cautious after the latest political developments in the region, and it may take an ECB economic policy meeting to actually bring it back to life. Technically, the 4 hours chart shows that a bearish 100 SMA keeps capping the upside, but that buying interest surges around the 20 SMA. Technical indicators in the mentioned time frame stand within positive territory, but lacking clear directional strength. At this point, the pair needs to advance above 1.1189, the postBrexit high to present a more positive outlook, whilst beyond 1.1000, the risk turns towards the downside, with scope then to test 1.0910.

Support levels: 11040 1.1000 1.0960

Resistance levels: 1.1110 1.1155 1.1190

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697
699
700

EUR/USD
The EUR/USD pair managed to advance modestly this Tuesday, surging up to 1.1122 during the American session, before settling around the 1.1100 figure. There were minor macroeconomic releases both shores of the Atlantic, with Germany’s Trade Balance for June resulting at €21.7B, missing expectations of €22.1B. The report also showed that exports increased by 0.3% against the 1.0% expected, while imports surged to 1.0%, compared to the previous month. In the US, the Nonfarm business sector labor productivity decreased at a 0.5% annual rate during the second quarter of 2016, according to preliminary estimates. The unit labor cost, however, rose beyond expected in the same period, up to 2.0% from the 1.8% forecast. Still, previous reading was downwardly revised to 0.2% from 4.5%, pushing the greenback lower in the last half of the day. Despite reaching a fresh weekly high, the EUR/USD pair remains confined to a tight range ever since the week started, and far from recovering its Nonfarm Payroll losses. The intraday advance stalled a couple of pips below the 38.2% retracement of its last two weeks’ rally, and unless the price extends well above it, the risk will remain towards the downside. In the 4 hours chart, the price is a handful of pips above a bearish 20 SMA, while the Momentum indicator heads higher within positive territory, but the RSI already turned lower from around its midline, indicating limited buying interest. The immediate support is the 50% retracement of the mentioned rally at 1.1095, but it will take an extension below 1.1045 to see the pair accelerating its decline during the upcoming sessions, towards the critical 1.1000 figure.

Support levels: 1.1095 1.1045 1.1000

Resistance levels: 1.1125 1.1160 1.1200

701

EUR/USD
Dollar’s weakness was the main theme across the forex board this Wednesday, exacerbated by thin trading conditions. Having been unable to rally over the firsts two days of the week, bulls finally gave up, leading to a sell-off of the American currency. US treasury yields dropped, down to 1.51% from previous 1.54%, adding to the bearish case of the greenback. The macroeconomic calendar was empty in Europe, with no relevant news releases, while in the US, the number of job openings was little changed, up to 5.62 million on the last business day of June, according to the U.S. Bureau of Labor Statistics.

The EUR/USD pair surged up to 1.1189, a major resistance level, given that it contained rallies for over a month after the Brexit, spending all of the American session consolidating below it, but above 1.1160, the immediate short term support. Nevertheless, a slightly positive tone persists ahead of the Asian opening, as in the 4 hours chart, the price is holding well above its moving averages, whilst the technical indicators consolidate near overbought territory. The price is hovering around the 23.6% retracement of its latest weekly bullish run, with the 38.2% retracement of the same rally at 1.1125, the level to break to deny an upward continuation for this Thursday.

Support levels: 1.1160 1.1125 1.1080

Resistance levels: 1.1190 1.1235 1.1280

702

EUR/USD

Quite a busy macroeconomic calendar last Friday, resulted in majors seesawing within wide ranges, with the dollar ending the day mixed across the board. In the EU, preliminary GDP readings showed that, while Germany keeps growing at a slow, but steady pace, the whole region is still struggling. German GDP for the second quarter came in at 0.4%, up by 3.1% compared to a year before. In Europe, however, Q2 GDP printed 0.3%, matching expectations and with the previous quarter revised down to 0.3%. Industrial production in the EU grew by 0.6% in June, beating previous -1.2%, but down year-on-year to 0.4%.

Still, the EUR/USD pair managed to advance up to 1.1221 ahead of Wall Street’s opening, on dismal US data. US retail sales for July came in flat on the month versus expectations of a 0.4% monthly gain, while the Producer Price Index for final demand decreased 0.4% in the same month. On an unadjusted basis, the final demand index moved down 0.2% for the 12 months ended in July. Disappointing retail sales and low PPI suggest the FED will be in no rush to raise rates. Adding to the dollar’s bearish case was the Michigan University index of consumer sentiment, at 90.4 for August against expectations of 91.5.

The dollar shrug off negative data and recovered most of the ground lost against the common currency, with the EUR/USD pair closing the week at 1.1161 and retaining its underlying negative bias, as in the daily chart, the pair retreated sharply once again from its 100 DMA. In the same chart, the Momentum indicator has turned lower within positive territory, whilst the RSI indicator continues lacking clear directional strength around neutral territory. The 20 DMA heads higher around 1.1090, converging with the 50% retracement of the latest bullish run and being the level to break to confirm additional slides. In the 4 hours chart, a bullish 20 SMA contained the downside during the past sessions, but is now a handful of pips below the current level, while the technical indicators head modestly lower around their mid-lines, increasing the risk of a downward extension for this Monday.

Support levels: 1.1125 1.1090 1.1045

Resistance levels: 1.1200 1.1235 1.1280

703

EUR/USD

The EUR/USD pair ends Thursday at its highest level since the Brexit slump, back on June 24th, as dollar’s sell-off resumed. Despite US FOMC Minutes left doors open for a rate hike, the mixed stance among policy makers suggests the Central Bank will pass from making a decision in September, and that they are in no rush to pull the trigger. The pair traded as high as 1.1356, paring gains due to tepid European inflation, as in the region, the Consumer Price Index plunged by 0.6% in July, below the already pessimistic 0.5% decline expected. The annual rate was of 0.2% in the same month, up from 0.1% in June.

In the US, weekly unemployment claims came in at 262K for the week ending August 12th, better than the 265K expected, while the 4-week average came in at 265,250, an increase of 2,500 from the previous week’s unrevised average of 262,750. Also, the Philadelphia FED manufacturing survey resulted at 2.0, as expected. Beyond German PPI, there are no major reports scheduled for this Friday, which means that the greenback has little chances of recovering ground.

From a technical point of view, the pair is poised to extend its advance on dollar’s weakness, although the rally can be limited by the lack of EUR´s demand. In the 4 hours chart, the RSI indicator heads north around 79, while the Momentum indicator diverges from price action, heading lower as price reaches fresh highs. The 20 SMA in the mentioned time frame, heads sharply higher below the current level, supporting a continued advance towards the 1.1460 price zone, a major long term static resistance.

Support levels: 1.1300 1.1265 1.1230

Resistance levels: 1.1360 1.1400 1.1460

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704

EUR/USD

After opening the week with a firm tone, the American dollar closes this Monday marginally lower across the board. The greenback’s gained pace on comments from FED´s Vice Chair Fisher, who stated that the Central Bank is “close to meeting its targets” of full employment and price stability, putting back on the table the possibility of a September rate hike. Also, a weakening yen, due to Kuroda’s comments over cutting rates further into negative territory, helped the USD. The market, however, reversed course with London’s opening, with no apparent catalyst behind, as the macroeconomic calendar has been empty during the first half of the day.

As for the US, the country released its Chicago FED National activity index, modestly higher in July, up to 0.27 from previous 0.05. Things will be more interesting this Tuesday, with the release of the eurozone flash PMIs for August and housing and manufacturing data coming from the US.

The EUR/USD pair trades near its daily high of 1.1330 ahead of the Asian opening, holding on to its recent gains and generally bullish, despite the lack of action seen this Monday has left technical readings within neutral levels. Still, in the 4 hours chart, the price is a couple of pips above a bullish 20 SMA and far above the 100 and 200 SMAs, whilst the technical indicators hover around their midlines, showing no upward strength at the time being. Still, the pair can extend its rally up to the 1.1360 region, last week highs, with a break above it supporting a continued advance up to 1.1460, a major static resistance level.

Support levels: 1.1265 1.1230 1.1190

Resistance levels: 11320 1.1360 1.1400

See more analysis at EUR/USD

After opening the week with a firm tone, the American dollar closes this Monday marginally lower across the board. The greenback’s gained pace on comments from FED´s Vice Chair Fisher, who stated that the Central Bank is “close to meeting its targets” of full employment and price stability, putting back on the table the possibility of a September rate hike. Also, a weakening yen, due to Kuroda’s comments over cutting rates further into negative territory, helped the USD. The market, however, reversed course with London’s opening, with no apparent catalyst behind, as the macroeconomic calendar has been empty during the first half of the day.

As for the US, the country released its Chicago FED National activity index, modestly higher in July, up to 0.27 from previous 0.05. Things will be more interesting this Tuesday, with the release of the eurozone flash PMIs for August and housing and manufacturing data coming from the US.

The EUR/USD pair trades near its daily high of 1.1330 ahead of the Asian opening, holding on to its recent gains and generally bullish, despite the lack of action seen this Monday has left technical readings within neutral levels. Still, in the 4 hours chart, the price is a couple of pips above a bullish 20 SMA and far above the 100 and 200 SMAs, whilst the technical indicators hover around their midlines, showing no upward strength at the time being. Still, the pair can extend its rally up to the 1.1360 region, last week highs, with a break above it supporting a continued advance up to 1.1460, a major static resistance level.

Support levels: 1.1265 1.1230 1.1190

Resistance levels: 11320 1.1360 1.1400

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705

EUR/USD
The American dollar lost ground against most of its major rivals during the first half of the day, with the EUR/USD pair extending up to 1.1355 in the London session, helped by positive data coming from the Old Continent. The flash Markit PMIs showed that Germany’s private sector continued expanded in August, with the manufacturing figure up to 53.6, above expected, but the services sector expanding at a slower pace, resulting at 53.3 from previous 54.4. For the euro area, the economy grew at a steady pace in the same month, with the Markit Composite PMI up to a seven-month high of 53.3. Later on the day, however, data showed that the EU consumer confidence decreased for a third month in-a-row, plunging to -8.5.
In the US, New Home Sales unexpectedly rose in July to the highest level in almost nine years, with sales increasing 12.4% to a 654,000 annualized pace. The FX market, however, was unimpressed with the news, as the flash Manufacturing PMI for August came in at 52.1, missing expectations of 52.7 and below July’s 52.9.
The EUR/USD pair retreated from the mentioned high during the US afternoon to settle around 1.1320, flat for a second consecutive day. Investors are waiting for the US Jackson Hole Symposium, where FED’s head, Janet Yellen, may offer some fresh clues over a timing of the next rate hike in the country. In the meantime, the 4 hours chart shows that the price is stuck around a horizontal 20 SMA, while the technical indicators lack clear directional strength around their mid-lines, failing to anticipate what’s next for the pair. Still, and as long as the price holds above 1.1300, the upside is favored, with a break above 1.1365, last week high, required to confirm an extension towards 1.1400 and beyond.
Support levels: 1.1320 1.1285 1.1240
Resistance levels: 1.1365 1.1400 1.1460

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706

GBP/USD

The GBP/USD pair broke below the 1.3100 level and fell down to 1.3059, its lowest in a week, as dollar’s demand persisted this Monday. The pair recovered some ground in the US session, but held below the mentioned 1.3100 figure by the end of the day around it. There were no fundamental news in the UK, as local banks remained close in observance of the Summer Bank Holiday, and the kingdom will only release its Money Supply figures on Tuesday, hardly a market mover. From a technical point of view, the pair has corrected the 50% of its latest advance, measured between 1.2865 and 1.3278, before bouncing, but the risk remains towards the downside, given that in the 1 hour chart, the price is being capped by a modestly bearish 20 SMA, while indicators aim higher, but within negative territory. In the 4 hours chart, the 20 SMA has turned strongly lower far above the current level, around 1.3160, while indicators have posted modest recoveries within bearish territory, still far below their mid-lines. The 38.2% retracement of the mentioned rally comes at 1.31230, now the immediate resistance and the level to break to see the pair recovering further.

Support levels: 1.3070 1.3025 1.2985

Resistance levels: 1.3120 1.3160 1.3200
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707

EUR/USD

Investors continued favoring the greenback this Tuesday, with the American currency extending its rally towards its monthly highs against most of its major rivals. Save-havens CHF and JPY suffered the most, whilst the Pound was the best performer against the USD. The EUR/USD pair fell down to 1.1131, its lowest in nearly three weeks, undermined by dismal European data. According to official releases, German inflation is expected to have risen by 0.4% in August 2016 and compared to a year before, while monthly basis, is expected to remain unchanged from July at 0.1%. Also, the EU Economic Sentiment indicator for August fell to 103.5 from previous 104.5, probably as a consequence of Brexit. In the US, however, August Consumer Confidence surged to 101.1, the highest is almost a year, from a downwardly revised reading of 96.7 in July.

The EUR/USD pair settled near the mentioned low, consolidating for most of the US afternoon in a limited range, as the market keeps waiting for some additional clues over a possible US rate hike. The country will release its Nonfarm Payroll report this Friday, which may fuel dollar’s advance particularly if wages present a more solid advance. The 4 hours chart shows that technical indicators have lost bearish momentum around oversold readings, whilst the price is currently stuck around its 200 SMA, and below the 20 and 100 SMAs, all of which maintains the risk towards the downside. The immediate support now is 1.1120, a major static level, with a break below it opening doors for further slides down to the 1.0950 region, August low.

Support levels: 1.1120 1.1075 1.1040

Resistance levels: 1.1160 1.1200 1.1245

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708

EUR/USD

The EUR/USD pair edged modestly lower this Wednesday, undermined by poor industrial output figures coming from Germany. The largest EU economy has been showing signs of economic weakness at the beginning of the third quarter, and this latest report confirms the slowdown in the industrial sector, as output during July fell by a seasonally adjusted 1.5% during July, when compared to the previous month. Majors, however, remain within their recent highs against the greenback, on diminishing hopes of a US FED September rate hike.

Early Thursday the ECB is having an economic policy meeting, although the European Central Bank is expected to remain on hold. An increase in the amount of bond-buying seems unlikely, given that falling yields in the region are shrinking the range of eligible assets. The most the ECB can do is announce an extension of the QE program beyond the March 2017 current limit, but seems unlikely that could be enough to fuel local growth and inflation. Generally speaking, Draghi is expected to offer a dovish, cautious speech that may result in some temporal weakness of the common currency.

The pair retains a positive tone according to intraday readings, as in the 4 hours chart, the price is moving around a horizontal 100 SMA, but above a now bullish 20 SMA. In the same time frame, technical indicators have corrected overbought conditions, but settled well above their mid-lines, as investors entered wait-and-see mode. The same chart shows that the price extended up to 1.1271 during the past American session, retreating from the 61.8% retracement of its latest daily decline, and the level to surpass to see further gains this Thursday. Should the market prefer the greenback, the key support is now former intraday highs around 1.1210, as a move below it would result in a return to the 1.1160 region.

Support levels: 1.1210 1. 1.1160 1.1120

Resistance levels: 1.1275 1.1310 1.1365

709

EUR/USD

The EUR/USD pair saw little action all through this Monday, confined to a tight range within 1.1210 and 1.1270, unable to attract investors amid a scarce macroeconomic calendar. Stocks plunged in Asia and Europe, tracking Wall Street’s Friday losses, and maintaining risk-averse trading as the main theme over the first half of the day. The greenback also benefited from FED’s jawboning, as Atlanta president, Dennis Lockhart, called for a “serious discussion” over rates during the upcoming September meeting. Also, a monthly survey from the New York FED showed that inflation expectations jumped to 2.8 % in August, the highest reading this year, from 2.5% in July.

A recovery in American indexes interrupted USD gains after the US opening, while mid US session, FED’s governor Lael Brainard said that the US Central Bank must guard against the low-growth, low-inflation environment that bedevils Europe and Japan, adding that the case for raising rates is “not compelling.” Her dovish words pushed the dollar lower across the board, with the EUR/USD pair advancing up to 1.1267, its daily high.

Closing the day marginally higher, the pair continues lacking definitions from a technical point of view, but the fact that is holding above the 1.1200 mark is keeping bulls interested. The 4 hour chart shows that the price is trapped within its moving averages with no directional strength, whilst technical indicators have turned higher within bearish territory, but remain below their mid-lines, suggesting a limited upward potential at the time being. A daily descendant trend line coming from this year high of 1.1615, stands today around 1.1290, being the level to surpass to see a more sustainable recovery during the upcoming sessions.

Support levels: 1.1200 1.1160 1.1120

Resistance levels: 1.1290 1.1335 1.1370

710

The EUR/USD pair treaded water around 1.1230 for a second consecutive day, even through the American dollar resumed its Friday’s advance and edged broadly higher against most of its major rivals. Mixed messages coming from FED’s officers, as all of a sudden jawboning has turned dovish, is clearly reflecting what the market knew with the previous meeting’s statement that is, that sentiment over a rate hike is split within policymakers. This is reducing dramatically chances of a rate hike as soon as this September, but the greenback is poised to extend its advance anyway.

Dismal data coming from Europe failed to attract sellers, although will clearly weigh during the upcoming sessions if the dollar remains strong. German inflation persists at low levels, as August CPI printed 0.4% YoY, matching July’s reading and market’s expectations, while in the month, it remain flat, coming in at 0.0%. The ZEW sentiment survey, showed that business sentiment in the country has remained unchanged at 0.5, while for the whole euro area came in at 5.4, both below market’s expectations. In the US, there was only a minor indicator released, the NFIB optimism index for August that resulted at 94.4 against previous 94.6.

The EUR/USD pair shed some ground at the end of the day, but holds above the 1.1200 level, and technical bias is still neutral, although the bearish potential is slowly increasing as in the 4 hours chart, the price has been unable to recover beyond a bearish 20 SMA, although in the mentioned chart, the technical indicators diverge from each other around their mid-lines, indicating to clear directional strength. The market is all about the greenback these days, and further dollar gains can push the pair below the 1.1200 mark, opening doors for a retest of last week low in the 1.1120 region. To the upside, a daily descendant trend line coming from 1.1615 is the level to surpass to deny a bearish move and see the price retesting this September high at 1.1366.

Support levels: 1.1200 1.1160 1.1120

Resistance levels: 1.1290 1.1335 1.1370

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711

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

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