Financial market research and analysis

The Australian dollar (-0.39%) has been the biggest loser against the US dollar in Asia, amid the most recent data showed an unexpected 0.5% contraction in the 3Q GDP. The capital expenditure fell by 2.7% quarter-on-quarter. The AUDUSD plunged to 0.7417 on speculations that the Reserve Bank of (RBA) would not be able to tighten the policy anytime soon. Hourly MACD turned negative, suggesting a potential extension of weakness towards 0.7400 (minor 76.4% retracement on Dec 1st to Dec 5th recovery), before 0.7370 (Dec 1st dip) and 0.7310 (Nov 21st low). The key short-term resistance is eyed at 0.7443/0.7448 (200-hour moving average & manor 38.2% retracement) and 0.7475.

The EURUSD consolidated gains above the critical short-term support of 1.0695 (major 38.2% retracement on post-Italian referendum rally). Yet, the fading positive momentum heading into Thursday’s European Central Bank meeting, suggests a short-term bearish reversal to 1.0664 (Fib 50% level), before 1.0641 (200-hour moving average). Solid resistance is eyed at 1.0800 / 1.0835 (50-day moving average). The EURGBP extended gains to 0.8474, as the EURJPY could settle within the hourly Ichimoku cloud (122.60 /120.95).

Cable treaded water before the manufacturing and industrial production data due today. The major 38.2% retracement on Nov 28th to Dec 6th rise, 1.2625, should distinguish between consolidation of the positive trend and a short-term bearish reversal to 1.2580 (Fob 50% level), before 1.2565 (200-hour moving average). A solid read should encourage a recovery to 1.2725 (100-day moving average), before 1.2774 (Dec 6th high).

The appetite in the USDJPY remains firm. The 50 and 100-hour moving averages (113.95) provided a solid intra-day support as the Bank of Japan (BoJ) deputy Governor Iwata said the bank would not hesitate to ease more if needed. There is no major support heading into the 105.00/105.50. Japan will release the 3Q final GDP data and current account on Thursday. Any pullback could generate interesting dip-buying opportunities.

Gold remains offered below the 100-hour moving average ($1171). High US yields are expected to keep the pressure on the downside for an extension of the weakness towards $1160/$1155.

Oil traders are on hold before the weekly US crude inventories data. A break above the $52.80/$53.00 per barrel of WTI could encourage a further rise to $54.00/$55.00. Failure to pick-up a fresh upside momentum should trigger a downside correction to $51.00 (minor 23.6% retracement on Nov 29th to Dec 5th rise), before $49.86 (major 38.2% retrace).