Financial Market Research and Analysis

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Gold hit $1117, oil cheapened past $30
EURUSD rallied to 1.0874 into the European open as risk averse traders returned to the single currency. Trend and momentum indicators turned neutral from negative, suggesting the formation of a stronger support at 1.0825 (Fib 23.6% on post-Draghi decline) for a re-test of 1.0877 (Fib 38.2%). Above this level, gains could extend to 1.0984/1.1000 (100dma / optionality). Key mid-term resistance is eyed at 1.1053 (200dma). On the downside, 1.0778/1.0805 (post-Draghi low / minor 23.6% on Aug-Dec’15 decline).

The yen strengthened through a risk-off trading session. Although the expectation for a BoJ intervention increases, there is no clear signal regarding this week’s meeting. Japan’s EconMin Amari said that BoJ doesn’t signal monetary easing in advance, that it won’t be as bold as the ECB and appropriate steps will be taken when needed. In fact, the BoJ prefers surprise action in order to obtain the maximum reaction from the market. Nevertheless, the persistent slide in oil prices is increasingly worrying as it decreases considerably chances to reach the 2% inflation target. USDJPY legged down to 117.66 support in Tokyo along with Japanese stocks. The formation of a bearish harami on the daily chart suggests that the sell-off could extend. However, the speculation that the BoJ may intervene should keep the downside limited. Ichimoku conversion line (117.43) is expected to lend support, this level also coincides with Fib 50% on Jan 20 – 25 rise). More support is eyed at 117.10/00 area. Decent vanilla puts trail below 116.80 for today’s expiry. On the upside, the Fib resistance at 118.95 (major 38.2% on Nov-Jan decline) is where the offers abound.

GBPUSD took another dive in Asia, London pushed Cable below 1.42. Sentiment remains negative and a break of 1.4150 (pivot) should pave the way for a re-test of 1.4080 (last week low) before 1.4040/1.4000 comes in radar. Key resistance is eyed at 1.4523 (major 38.2% on Dec-Jan decline). Below this level, traders are expected to remain seller on rallies. Intermediate resistances stand at 1.4255/50 (yesterday’s support turned resistance), 1.4354 (minor 23.6%).
AUDUSD remained below 0.70 as falling commodity prices kept the bears in charge of the session. Trend and momentum indicators remain neutral. Support is eyed at 0.6915 (pivot), then 6864 (Jan 15 low).A break above 0.7017 (Fib 38.2%) is needed to assess a short-term bullish reversal for an extension of gain to 0.7075 (Fib 50%).
Mid-term critical resistance remains at 0.7380 (Fib 38.2%). Below 0.7380, the mid-term bias remains negative and we see opportunity in selling the rallies.

Gold Renewed risk-off in Asia helped clearing offers at 1105/1115 and opened the way to 1128/1130 (one-month uptrend channel top).

Oil slipped below $30 again. Qatar said it sees the oil market rebalancing after one more downturn cycle as today’s price is not sustainable. Saudi and Iran may well remain determined not to give up the fight for market share. Support at $30/29.50 is being cleared and could well revive discussion of a possible slide toward $25.