Financial Market Research and Analysis

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AUD rallies on inflation
The EURUSD rebounded from 1.0842 yesterday, yet the pair is having hard time gaining a significant upside momentum. The 30-day RSI is still below 30 (at 28.2), suggesting that the market is preparing to step out of the oversold market. A further consolidation, or minor upside correction is on the menu for the euro, before a fresh downside attempt. Intra-day resistances are seen 1.0942 (200-hour moving average), 1.0952 (minor 23.6% retracement on Sep 26th to Oct 25th decline) and 1.1015 (major 38.2% retrace).

The USDJPY extended gains to 104.86 yesterday, clearing a part of 104.50 / 104.65 offers. Call options at 104.00, and below, are expected to give support to the USDJPY today. Next resistance is eyed at 105.00, max 105.50. Short-term support stands at 103.98 (200-hour moving average), 103.74 (minor 23.6% retracement on Sep 27th to Oct 25th rise), 103.15 (Oct 19th low) and 103.04 (major 38.2% retracement).

The GBPUSD tanked to 1.2082 before the Bank of England (BoE) Governor Carney’s speech yesterday, and pared half of losses as Carney said that a post-Brexit loose monetary policy ‘isn’t a given’. The pound remains weak however, as traders remain reluctant to open fresh long positions given that downside risks prevail. Surpassing 1.2207 (Fibonacci 50% on Oct 19th to Oct 25th decline) could encourage a recovery to 1.2295 (major 38.2% retracement on Sep 28th to Oct 7th crash), before 1.2330 (weekly resistance). Intra-day supports are eyed at 1.2141 (short-term minor 23.6% retracement), before 1.2080 and 1.2000 mark.

The Aussie was the biggest G10 gainer against the US dollar, as a stronger than expected inflation report revived the Reserve Bank of Australia's (RBA) hawks . The AUDUSD advanced to 0.7709 in Sydney. Stronger trend and momentum indicators hint at a second test of the 0.7730 mid-term resistance, if cleared, could encourage a further attempt to 0.7750, before 0.7790/0.7800. Intra-day supports are eyed at 0.7680 (minor 32.6% retracement on Oct 13th to Oct 20th rise), before 0.7647 (major 38.2% retrace) and 0.7639 (200-hour moving average).

Gold is approaching the critical support at $1280, the 200-day moving average, if cleared, should encourage a further recovery to $1297 (minor 23.6% retrace). The $1255/1250 is expected to give support to the current bullish development.

The WTI slipped below the $50 level in New York and consolidated losses in Asia. We could see a deeper downside correction to $49.00/$48.80, before $48.30. Short-term resistances are eyed at $50.00 (minor 23.6% retracement on Oct 19th to Oct 25th fall) and $50.42 (major 38.2% retrace).

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