Financial Market Research and Analysis

Our analysts have their fingers on the pulse of the world's financial market news.

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Oil slides, GBP plunges
For the 4th session in a row, the EURUSD tested the 1.1100/1.1120, which is the ascending trend-line base on December 3rd low, March 1st low and May 29th low. As the US dollar is retreating, the pair advanced to 1.1163, now targeting the next resistance at 1.1200 (38.2% major Fibonacci retracement on December to April rise). If this level is broken, the EURUSD gain momentum towards the 1.1225 (100-day moving average) before a further rise to 1.1314 (50-day moving average). A retreat below the 1.1097 (May 30th low) could provoke a new downside move, with the critical support at 1.1070 level (50% Fibonacci retrace & 200 day moving average).

Japanese PM Abe decided to postpone the decisions on sales tax hike. The USDJPY fell along with the Japanese stocks. The USDJPY plunged below the 110.00 mark and appears to be ready to test the support at 109.35 (23.6% Fibonacci retrace on February to April decline), if broken, could send the pair to a month low, 107.38 (11.4% Fibonacci retracement). On the other hand, the USDJPY could find new strength on the first support and bounce higher to 111.17 (100-day moving average), if cleared could allow a further advance toward the important level of 111.70 (38.2% Fibonacci retracement on February to April decline).

The UK investors got hit by a new poll showing a majority of voters in favour of Brexit. Even a better-than-expected PMI manufacturing read could not reverse the trend. The GBPUSD tanked from above 1.4650 to 1.4465 and the outlook remains negative with the next support seen at the 1.4411 (38.2% major Fibonacci retracement on February to May rise). Below this level, Cable could continue trading on the downtrend after having formed a double top with neckline seen around 1.4340, where the moving average is laying. The first resistance is eyed at 1.4506 (June 1st high) before the 1.4547 (23.6% Fib retrace).

The Australian GDP exceeded expectation for the 1st quarter, with a 1.1% growth against 0.6% forecasted. The chances of RBA to cut iinterest rates in June seems to fade away, while swap traders seem more pessimistic as they start to price in a 47% probability of an interest rate cut by August. This is the reason why the AUDUSD is moving higher. The pair is currently trading at 0.7258 after having tested the 200-day moving average resistance, 0.7283. If the AUDUSD surpasses the resistance, we might see a further upside to 0.7330 (50% Fibonacci retracement on January to April rally).
The first support is seen at the critical 0.7211 (38.2% major Fib retrace), and if this level is broken, the pair could fall to 0.7060 (23.6% Fib retrace)

Gold is consolidating gains after having recorded its first advance in 10 day yesterday. The first resistance level is eyed at 1229 (70.7% Fib retrace on December to May rise), and if this is surpassed, we could see a test of the 1233 (100-day moving average) before a further recovery up to 1243 (76.4% Fibonacci retrace). There is a solid support at 1205 (61.8% major Fib retrace), if broken could cause a plunge toward the 1175 (50% Fibonacci retracement).

WTI
sets for the longer run in 5 years ahead of June 2nd OPEC meeting in Vienna. No agreement is expected out of this meeting. Oil is trading below the 49.00 mark, with the next support seen at 47.62 (May 24th low). A new upside to the 49.20/40 area (100 and 50 hours moving averages) could again open the gate for the 50$. Offers are solid at this level.

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