USDJPY tests resistance

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The Japanese yen struggled as the Q4 GDP fell short of expectations. The pair’s latest retracement found support over the psychological level of 130.00 which coincides with a resistance level from a previous swing low. A subsequent break above 131.80 indicates solid commitment from the buy side. A close above 132.90 would attract momentum buyers and send the pair to the daily resistance at 134.70. An overbought RSI has tempered the bounce and 131.50 is a key level to keep the optimism going in the short-term.
 

EURAUD grinds support

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The Australian dollar holds strong as markets remain risk-on. On the daily time frame, a close below last November’s consolidation zone at 1.5300 has put the bulls on the defensive. A previous rebound came to a halt at 1.5650, suggesting a strong downward pressure. The single currency is treading water above 1.5360 and its breach would expose the floor at 1.5270 where a bearish breakout could trigger a sell-off towards 1.5000. On the upside, stiff selling could be expected in the supply zone between 1.5510 and 1.5560.
 

US 30 tests supply area

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The Dow Jones 30 steadies as investors reposition ahead of January’s CPI reading. On the daily chart, the index is consolidating its gains in a triangle pattern. Despite a choppy price action, the general direction still tilts to the upside as pullbacks have been brief. The supply zone around 34300 has kept the bulls in check but its breach would force the bears to throw in the towel and open the door to an extended rally to last December’s peak at 34900. 33800 is a fresh support in case the bulls need to gather strength.

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