Financial Market Research and Analysis

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ECB in focus post-Brexit
The European Central Bank (ECB) delivers its first monetary policy verdict after UK’s decision to leave the European Union. EURUSD is trending sideways, the key technical resistance is eyed at 1.1051, major 38.2% retrace on July 14 – 20 drop, above which the EURUSD could step in bullish consolidation zone towards 1.1200 mark. The first support is seen at 1.1000 mark and below this level the pair could slide to test the 1.0940 (major Fibonacci retracement). Below this level, the pair will likely remain in the bearish trend started at the beginning of May, with next support at 1.0781 (Fibonacci retracement).

The yen is offered on speculations of a further monetary stimulus from the Bank of Japan at next week’s meeting. USDJPY moved above the 107.00 yet failed to clear offers pre-100-day moving average at 107.50, which triggered an aggressive sell-off to 105.60, right above the 50-day moving average support. If the pair breaks below this level, we could have a new slide to 104.26 (Fibonacci retracement). On the upside, the pair could soar to test the 100-day moving average once again, and if broken, we expect a further extension towards 110.00/110.27 (Fibonacci retracement).

Cable soared to 1.3275 in early Asian trading, then retraced right above the 1.3200 mark. Strong inflation report and solid jobs data pushed the pound higher, even though the most of released data were collected pre-Brexit vote. The next GBPUSD resistance is seen at 1.3300 mark. Above that level, the price could rise to 1.3400/1.3415 (Fibonacci retracement), then to 1.3500 mark. If Cable breaks the 1.3200 support to the downside, we could see a new slide to 1.3064 (July 20th low), before the 12851 (July 11th low).

After two negative sessions in a row, AUDUSD gapped down to 0.7420 (50-day moving average), then soared above the 0.7500 mark. The next resistance is eyed at 0.7593/0.7600 (Fibonacci retracement), and if this is surpassed, we can expect the pair to target the 0.7675 resistance (July 15th high). If the Aussie loses strength, we could see a new fall below the support 0.7420 with target the critical support level 0.7338 (200-day moving average).

The risk-on trading continues. Gold plunged 1%, below $1320, hitting a three-week low. Next support is seen at $1300, below that level, we could see a slide to $1297 (Fibonacci retracement), then to $1288 (50-day moving average), $1269 (100-day moving average) and the critical $1250 (major Fibonacci retracement).
On the upside, a rise above the $1319 (intraday high) could push gold prices higher to $1338 (July 20th high), then towards $1374 (July 11th high).

The EIA showed that the US stock fell by 2.3 million against an expected contraction of 1.3 million. WTI soared above $45.50 with next resistance at $46.00 mark and once that is surpassed we could see a further upside to $46.76 (Fibonacci retracement). First support is seen at $45.00 mark and if that is broken, the price could slump to $44.00 mark, then to $43.65 (July 20th low).

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