The American dollar traded broadly lower against most of its major rivals, as renewed oil's weakness spurred risk aversion across the board, resulting in a sharp decline in worldwide stocks. The TEUR/USD pair advanced up to a daily high of 1.0939 this Tuesday, but was unable to advance further beyond the top of its recent range, easing towards the 1.0890 region, where short term buying interest sent it back towards its highs. In Europe, the EU Producer Price Index in the region fell by 0.8% in December, compared to the previous month, and edged down to -3.0% compared to a year before. In Germany, however, unemployment fell to its lowest since German unification, down to 6.2% in January. In the US, Kansas FED's George repeated that upcoming rate hikes will depend on the economic outlook, and that the Central Bank should continue with a gradual pace of rate hikes. Also, oil prices plummeted, with WTI futures briefly falling below $30.00 a barrel, spurring some risk aversion and sending worldwide stocks into the red.

As for the pair, the EUR/USD continues pressuring the top of its recent range, but remains unable to break higher, moreover as investors entered wait-and-see mode ahead of the US Nonfarm Payroll report next Friday. Technically, the upside is favored according to the 4 hours chart, as the Momentum indicator heads sharply higher within bullish territory, while the RSI also heads north around 56, while the price stands above its moving averages. Nevertheless, the 1.0930/60 region has proved strong ever since mid December, and unless a strong break above it, the upside will remain limited.

Support levels: 1.0880 1.0845 1.0810

Resistance levels: 1.0930 1.0960 1.1000


The USD/JPY pair sunk in the American session, as risk sentiment picked up following a triple digit decline in the DJIA. Crude oil prices fell towards $30.00 a barrel, and resume its roll of market leader, although China also had a part in ongoing risk-averse trading as the PBoC to intervene markets once again, by injecting 100bn Yuan. The 1 hour chart for the pair shows that the price is currently a couple of pips below its 100 SMA, while the technical indicators are giving signs of downward exhaustion near oversold territory, limiting chances of a downward acceleration. In the 4 hours chart, however, the pair presents a strong bearish tone, given that the technical indicators head sharply lower within bearish territory. The pair has now its next support around 119.75, the 50% retracement of the latest daily decline. A break below this last should signal further declines for this Wednesday, with 118.90 as a probable bearish target.

Support levels: 119.75 119.35 118.90

Resistance levels: 120.30 120.70 121.20
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