Financial market research and analysis

The EURUSD extended gains above its 50-day moving average, 1.1115, for the first time in a month. The pair has gathered enough positive momentum to challenge the 100-day moving average (1.1128) before 1.1200 (200-day moving average). We shift our intra-day supports higher to 1.1060 (minor 23.6% retracement on Oct 25th to Nov 2nd rise), 1.1020 (major 38.2% retrace) and 1.0988 (Fib 50% level).

The risk-off weighs on the USDJPY. The break below the critical 103.44 (major 38.2% retracement on Sep 27th to Oct 28th rise) suggests a short-term bearish reversal. As investors return to the safe heaven yen, the 102.80 (Fib 50% level) is severely threatened, if broken, should encourage a further sell-off to 102.16 (major 61.8% retrace) and 102.00. The key short-term resistances are eyed at 103.44 (major 38.2% retrace), before 104.40 (200-hour moving average), 105.00 (optionality) and 105.50 (200-day moving average).

The GBPUSD is firmer heading into the Bank of England’s (BoE) decision and the quarterly Inflation Report (QIR). The UK’s growth and inflation forecasts are in focus and could trigger a minor volatility in the day. However, as the positive trend is predominantly due to a softer US dollar, the 1.2250 (major 38.2% retracement on Oct 25th to Nov 2nd rise) and 1.1218 (Fib 50% level & 200-hour moving average) are expected to lend support for a further pound recovery.

The AUDUSD was better bid on a broad-based USD sell-off. Yet the risk-off environment is a barrier for a break above 0.7700, and 0.7710/0.7730 mid-term resistances. We could see a decent profit taking approaching these levels. Intra-day supports are eyed at 0.7652 (major 61.8% retrace Oct 26th to Oct 28th decline), 0.7634 (Fib 50% level), before 0.7616 (major 38.2%), which should distinguish between a mean-reversion pattern and a short-term bearish reversal.

Gold traded above $1300 for the first time in a month. The rising risk aversion could encourage a further advance toward $1317 (100-day moving average), before $1330 and $1345/1350 mid-term resistances. A minor support is eyed at $1297 (minor 23.6% retrace on Dec’15 to Jul’16 rise), before the critical 200-day moving average, $1280.

The WTI plunged to $45.35 as the US crude inventories surged by an impressive 14.4 million barrels last week, versus 1.6 million expected. The soft US dollar could slowdown the pace of the oil sell-off, yet remain insufficient to reverse the bearish trend. The short-term resistances are eyed at $46.85 (minor 23.6% retracement on Oct 19th to Nov 2nd fall) and $47.88 (major 38.2% retrace).