Following the disappointment in the US jobs data, Fed Chair Yellen's speech was slightly more dovish than expected yesterday. She mentioned a “considerable uncertainty about economic outlook”. Traders assess 4% probability to a interest rate hike at the June 14-15 meeting (down from 30% a week ago), and a 20% probability for a rate hike in July (down from 60% last week before the NFP data).
The EURUSD is consolidating above the support at 1.1359 (23.6% Fibonacci retracement), with next resistance seen at 1.1400 before the 1.1490/1.1500 Fibonacci retracement.
If the support is cleared (comma) the pair COULD retrace to test 1.1300 (50-day moving average), then to 1.1234 (100-day moving average) and the critical 1.1197 (major Fibonacci retracement).
Governor Kuroda said that the central bank doesn’t hold a big stake in the ETF market, triggering expectations of a further monetary stimulus ahead of next week's BoJ meeting.
The USDJPY consolidates above the 107.00/107.37 area (Fibonacci retracement), with a potential to push higher towards the 108.00 mark and then to 109/109.35 (Fibonacci retracement). A break of the support could cause a retracement to 106.36 (June 6th low), before 105.54 (May 2nd low).
What traders consider a fat finger on pound pushed the GBPUSD by 1.5% higher to 1.4660, before retracing below 1.4600. The pound is gaining territory after a 1.1% drop on Monday due to three polls showing a favourable Brexit outcome and two more polls showing a majority of voters willing to remain in the EU. Next resistance level is seen at the critical 200-day moving average at 1.4621, while a fall below the 1.4411 (38.2% major Fibonacci retracement) could cause a slide to test 1.4337 (100-dma) which is also the neck-line of a double top pattern.
The RBA maintained the status quo as expected. The Australian dollar rose to a four-week high, also supported by the bullish momentum in commodities and fading expectations of a Fed rate hike in June/July meetings. Trend and momentum indicators are positive, suggesting that the AUDUSD rally could continue if the resistance at 50-day moving average, 0.7435, is cleared. First support is seen at 0.7417 (100-day moving average).
Gold consolidates above the 1240/43 (76.4% Fibonacci retrace) on fading Fed rate hike expectations following the more dovish-than-expected speech from Fed Chair Yellen yesterday.
WTI traded to 49.68$ a barrel, along with a bullish commodity market. With the cheapening US dollar, we could expect the 50$ to come under pressure.