EUR/USD
The EUR/USD pair turned higher and closed the day with modest gains around 1.1780, as US PPI data provided a reality check on where US inflation and therefore the Fed stand these days. US July headline PPI came in below expected, falling 0.1% monthly basis, and up by 1.9% when compared to a year earlier. The core readings were also a miss, clearly suggesting that the Fed would be in no rush for additional tightening. Additionally, Fed’s Dudley spoke, saying that he expects inflation to surge above 2% in the medium term, and growth to remain moderate, adding to the case for a Fed’s gradual policy-tightening plan. Anyway, the greenback closed the day mixed, one again sharply lower against safe-haven assets, an only higher against those currencies who shed ground on self-weakness.
Friday’s macroeconomic calendar anticipates a busy end to the week, as several members of the EU will release their July inflation figures, including Germany, while the US will also unveil it July CPI figures. These lasts are expected pretty much unchanged, but the PPI figures were also forecasted to be stronger that the final result according to other economic indicators.
From a technical point of view, the bearish pressure seems to have eased, as the pair posted a higher low daily basis, at 1.1703 and a higher high. For the short term, the 4 hours chart shows that the price remains is surpassing a bearish 20 SMA, while technical indicators turned higher, with the Momentum accelerating north within positive territory and the RSI indicator also up, now at 53. The immediate resistance is now 1.1820, with gains beyond it putting the pair on track to retest the yearly high of 1.1909.
Support levels: 1.1730 1.1690 1.1650
Resistance levels: 1.1820 1.1860 1.1909
USD/JPY
The USD/JPY pair remained under pressure all through this Thursday, falling down to 109.20 area late US session and heading into the Asian one nearby, as tensions between North Korea and the US coupled with poor US data that suggested that the Fed won’t need to rush into tightening. US Treasury yields plunged alongside with equities, with the 10-year note benchmark reaching a fresh intraday six-week low of 2.21% and holding nearby at the end of the day, and the 30-year note yield setting at 2.80%. Wall Street had a rough day, with the DJIA and the Nasdaq on a three-digit decline adding to the negative momentum of the pair. The Japanese calendar will remain empty this Friday, which means that local equities will lead the way, and given the latest behavior of European and American indexes, there’s a good chance local shares will follow-through. From a technical point of view, the pair gives no sign of changing course, despite being oversold, as in the 4 hours chart, technical indicators are hovering near oversold readings, but the price keeps posting lower lows, while moving further below bearish 100 and 200 SMAs. The immediate support is 108.80, June’s low, with a break below the level favoring an extension down to 108.12 this year’s low set last April.
Support levels: 109.50 109.20 108.80
Resistance levels: 110.15 110.40 110.70
GBP/USD
The GBP/USD pair settled at 1.2974, having, however, extended its weekly decline by a few pips to 1.2951 early London session. A bunch of fresh data coming from the UK failed to support the Pound, as it was in balance negative for the kingdom. For June, Industrial Production posted a modest advance, while Manufacturing Production remained flat, whilst the trade deficit widened by £2.0 billion to £4.6 billion. Also, the NIESR GDP estimate for the three months to July suggests that UK’s output grew by 0.2%, below previous and expected 0.3%, with the economy running below its long run trend. Weak US data helped the pair bounce intraday, but remained unable to surpass the 1.3010/20 region, retreating twice from it. In the 4 hours chart, a flat 200 EMA and a bearish 20 SMA converge in the mentioned region, reinforcing the static support, while technical indicators retain the neutral-to-bearish stance, as the Momentum indicator remains directionless below its 100 level whilst the RSI turned south, but holds above previous lows. A break below 1.2950 will likely lead to or a steady slide towards the 1.2870 region, the next relevant static support.
Support levels: 1.2950 1.2910 1.2870
Resistance levels: 1.3015 1.3050 1.3090
GOLD
Gold prices extended their rallies to fresh 2-month highs this Thursday, with spot ending at $1,285.00 a troy ounce after trading as high as 1,287.74. The commodity added roughly $35 during the last three days, an impressive run to safety amid escalating tensions between the US and North Korea. A softer-than-expected US producer price index backed gold’s rally, as the figures weaken the case for the US Fed to raise interest rates again this year. The bullish potential remains intact, given that in the daily chart, the 20 DMA accelerated north with a strong upward slope below the current level, whilst technical indicators keep heading north, now approaching overbought territory. In the 4 hours chart, technical indicators are losing upward strength, but still holding within overbought readings, whilst moving averages gain upward strength below the current level, favoring another leg higher towards the 1,300.00 figure.
Support levels: 1,281.20 1,270.10 1,261.30
Resistance levels: 1,288.90 1,296.10 1,303.10
WTI CRUDE OIL
Crude oil prices plunged on Thursday, with West Texas Intermediate futures settling at $48.56 a barrel after trading as high as 50.20, hit by news coming from Russia, as oil producer Gazprom considers it "economically feasible" to resume production in mature fields after a global agreement among OPEC and non-OPEC expires. The news came after the OPEC announced its oil output rose by 173K barrels per day in July, suggesting that the market’s glut will persist into 2018.The commodity is at the lower end of its last two-week range and looking quite vulnerable early Asia, as in the daily chart, the benchmark is pressuring its 20 SMA whilst technical indicators turned sharply lower, about to enter negative territory. In the 4 hours chart, the price broke below its 20 SMA and is currently challenging a bullish 100 SMA, while technical indicators head sharply lower within bearish territory, supporting a bearish extension for this Friday.
Support levels: 48.50 47.90 47.20
Resistance levels: 48.80 49.65 50.20
DJIA
US equities had their worst day in over three months, with the Dow Jones Industrial Average down 204 points to settle at 21,844.01, its lowest since late July. The Nasdaq Composite shed 135 points and closed at 6,216.87, while the S&P ended at 2,438.22, down 1.45% or 35 points. Rising geopolitical tensions alongside with soft US PPI figures were behind the decline, with the tech sector being the worst performer. Within the Dow, only 3 members managed to close in the green, with McDonald’s leading the advance, up 1.19%, followed by Coca Cola that added 0.38% following its UK associated earning report. Apple was the worst performer, down 3.19%, followed by Goldman Sachs that shed 2.26%. The index pared losses after testing its 20 DMA in the daily chart, in where technical indicators turned sharply lower, but are still within positive territory. In the 4 hours chart, technical indicators present a strong bearish momentum, despite having entered oversold territory, whilst the 20 SMA gains bearish traction well above the current level, supporting additional slides ahead.
Support levels: 21,808 21,760 21,719
Resistance levels: 21,897 21,941 21,992
FTSE100
The FTSE 100 shed 106 points to end at 7,389.94, its lowest close for this August. Sentiment was again behind stocks’ decline while for the London benchmark, a softer-than-expected economic growth estimate, dented further local investors’ mood. The Footsie shed some 50 additional points in after hours trading, tracking Wall Street’s decline. Notably, Coca-Cola HBC led advancers with a whopping 9.2% gain after reporting first half earnings growth with sales supported by warmer weather, followed by Worldpay Group that added 4.89%. Most members were down however, with InterContinental Hotels Group being the worst performer, down 3.07%. The Footsie’s daily chart presents a strong bearish stance, as the benchmark broke below its 20 and 100 DMAs, while technical indicators entered negative territory with strong bearish slopes. In the shorter term, and according to the 4 hours chart, the bearish potential is also strong, as the index is far below all of its moving averages, whilst technical indicators retain their bearish slopes, despite being in oversold territory.
Support levels: 7,340 7,302 7261
Resistance levels: 7,383 7,410 7,445
DAX
European equities remained depressed amid risk aversion, with the German DAX ending the day at 12,014.30, down 138 points or 1.15%, its lowest settlement since mid April. European indexes followed the lead of their Asian counterparts, and within the DAX, only two members managed to close in the green, ProSiebenSat.1 Media that added 0.38% and ThyssenKrupp that ended up 0.34%. The worst performer was Henkel, down 4.215, followed by Deutsche Bank that shed 3.78%. The index fell further in after-hours trading, heading into the Asian opening well below the 12,000 threshold. The bearish Momentum is strong according to technical readings in the daily chart, as indicators head lower within bearish territory, whilst the index approaches its 200 DMA at 11,906, now a probable bearish target for this Friday. In the 4 hours chart, the index is bar below now bearish moving averages, whilst technical indicators heading lower within oversold levels, in line with further slides ahead.
Support levels: 11,955 11,906 11,867
Resistance levels: 12,012 12,054 12,098
