The EURUSD is down at 1.2615 following declines over 5 of the past 6 trading days. The pair touched a new low of 1.2571 during yesterday's session. Tuesday saw a great deal of economic data released in Europe. German Retail Sales and French Consumer Spending impressed. German Unemployment Change disappointed markets while the Italian Unemployment Rate improved and the EUR Unemployment Rate stayed flat at 11.5%. The Core CPI Flash Estimate printed at 0.7% annual rate and kick started the move down in the EURUSD. The EURUSD declined by 1.5% last week and around 200 pips and looks set repeat the feat this week. A breach above of 1.2635 then 1.2715 followed by 1.2815, 1.2825 and then 1.2835 is required to signal a possible upward correction. At present the Euro is under pressure with the pair below 1.30 and still trading below the downtrend channel as seen in the H4. As long as the pair remains below 1.30 and below the downtrend channel, the bias remains bearish. Coming up tomorrow EUR Minimum Bid Rate and ECB Press Conference.
EURUSD Support areas include 1.2600, 1.2575, 1.2550 followed by 1.2450. Resistance levels above are at 1.2700, 1.2800, 1.2900 1.2959, 1.30 figure level, followed by 1.3165.
The USDJPY hit 110.09 breaking above the 110 level for the first time since August 2008. The price has pulled back since to the 109.75 area. This is still above the previous high of 109.71 and this is a moderately bullish signal in the short term. If the pair goes below 109 and consequently 108.40 then this could signal a possible reversal pattern. In Japan overnight we are expecting economic data in the shape Monetary Base y/y. The pair is up 10% since early August and any further moves here could be wild in either direction. The USDJPY has had 26 up days vs 10 down days in the last 36 trading days and has been moving in a very aggressive uptrend. The expectation of a good NFP number on Friday is one factor accelerating USD gains.
Support levels for USDJPY can be seen at 109.46, 109, 108.39, and 107.50. Resistance to the upside at 110, 111, 112, 113.
Crude Oil slumped over 4% declining from $94.90 a barrel to $90.80 in just over 3 hours of trading. Crude Oil had so far held its ground amidst a powerful USD rally. Not always but usually commodities that are priced in USD decline as the dollar strengthens. Crude Oil Inventories from the US today are expected to show an increase in the stockpiles held by the major firms. This indicates a worsening supply demand dynamic, ie either less consumption or more supply. There are noises in the market calling for production and supply/output cuts if the price continues to decline. All eyes are on the US, Eurozone and China economies in terms of demand and also on the geopolitical conflicts as supply disruption could hurt the market and raise the price. The three economies noted above consume the bulk of the Crude Oil, China alone consumes 11% of the global oil consumed across the world daily. The US is reported to demand 21% of the Crude Oil. With the US, Eurozone and China combined this percentage exceeds 40%. At present the US economy is expanding, China is stable and the Eurozone is a weak spot.
Support levels for Crude Oil can be seen at $90.00, $89.25, $87.50, $85.00. Resistance to the upside at $92, $93.50, $95.00 $96.25, $97.50, $99 and $100 a barrel.