Financial Market Research and Analysis

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EURUSD firmer before ECB

EURUSD recovered to 1.1045 on broad based USD weakness. The key mid-term resistance at 1.1047/51 (200-dma / Fib 38.2% retrace on Dec-Feb rise) is expected to shelter some offers before this week’s ECB meeting. Above this area, vanilla calls at t 1.1050-1.1100 would however be supportive of a further advance to 1.1175 (minor 23.6% retrace on Dec-Feb rise) and 1.1376 (Feb  11th high). Below 1.1047/51 area, the EURUSD is considered in the bearish trend with the possibility of pullback to 1.0826 (Mar 2nd low). A break below this level could pave the way to 1.0800/10 (February lows) then all the way down to the 1.0725 (minor 74.6% before 1.0524 (Dec low). 


USDJPY consolidated above the 113.50, minor 23.6% retrace on Feb decline. Trend and momentum indicators remain marginally positive suggesting that a recovery toward 115.08 is still possible (major 38.2% retrace, 115.08, on Jan 29 – Feb 11 slide). Surpassing 115.08 will signal a potentially sustainable recovery to 116.34 and 117.60 (Fib 50% and 61.8% retrace). Support is seen at 113.50/30 (Fib level) before 112.00, last week’s low. The key support stands at 110.99 (Feb dip).

 

GBPUSD extended gains to 1.4276. Trend and momentum indicators are stronger for a break above the 1.4300 and an advance to .4350. Support is eyed at 1.4154, major 38.2% on February-March decline, if broken could signal a further pullback to 1.4032/1.4000 (minor 23.6% / psychological support).

AUDUSD consolidates gains above 0.7385 (major 38.2% on May’15 – Jan’16 slide / Dec’14 high) despite the dramatic slump in Chinese exports/imports. It appears that the 18.59% jump in iron ore tempered the sell-off in Sydney. The pair is still in the bullish consolidation zone with the possibility of a further rise toward the 75 cent mark (which is also the Fib 50%). On the downside, 0.7341 (major 38.2% retrace on Feb 29th – Mar 7th rise) is expected to lend support to the current bullish development. More support is seen at the critical 200-dma (0.7251).

 

Gold consolidated gains between $1256/1259 as the Fed expectations remain soft. The upside momentum is picking up for an extension toward $1300 mark. Support is eyed at $1250/1245 (March 3rd, pre-NFP low/ 200-hma).

 

Brent hit $41 for the first time in three months, WTI traded above $38 yesterday. The worrisome trade figures from China curbed appetite earlier in the session. Trend and momentum indicators are positive, the RSI (67%) is not in the overbought territory yet, suggesting that there is potential for a renewed attempt to extend gains above the 100-dma ($37), and even to target the $40 mark. On the downside, support is seen at $34.30 (200-hma), then at the 50-dma ($32.35). If support at this level is broken, we could expect to see a further fall to $31.95 (21-dma) before considering a potential a re-test of the $30 mark.

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