Financial Market Research and Analysis

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

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Pound in focus ahead of BoE
After last week rally from 1.0950 to 1.1150, EURUSD has broken the 200-day moving average to the upside, so we could expect a new rise to test the 1.1200 mark (Fibonacci retracement). Above this level the pair could surpass the 1.1230 (100-day moving average) and develop a new rally towards 1.1300/1.1357 (Fibonacci retracement). First support is the 1.1150 (50-day moving average), and id this is cleared, we could see a set back on the 1.1127 (200-day moving average). Below this level the pair could slump to 1.1070 (Fibonacci retracement).

USDJPY hit 101.82 after the Bank of Japan (BoJ) disappointed on Friday. The markets are now expecting the government to announce a massive fiscal stimulus package. Downside risks prevail given the very high level of expectations. Any disappointment on the fiscal leg could trigger a fresh wave of sell-off in USDJPY; the 100 level is still on the table.

The GBPUSD stepped in the short-term bullish consolidation zone, above 1.3217, major 38.2% on July 15 – July 26 decline. We warn that bears could well be around the corner, as the Bank of England is expected to lower its economic forecast and cut the bank rate on Thursday meeting.

AUDUSD extended gains to 0.7615, yet the AUD-bears are expected to cap the upside in the wake of the Reserve Bank of Australia (RBA) meeting. RBA is expected to lower the cash rate by 25 basis points at tomorrow’s policy meeting. Hence, we could expect a pullback to 0.7500, before 0.7465/0.7446 (100-day moving average & Fibonacci retracement). Below this level, AUDUSD could further plunge to the critical 0.7350 (200-day moving average).

On Monday Gold was consolidating gains at $1350, after rising to a near 3-week high in the previous session, on the back of slower growth figures in US. The next resistance is the $1374 top level (July 11th high) and if that is surpassed, we could expect a fresh new high towards $1400 an ounce. The first support is seen at $1310 (July 21st low), and if that is cleated the precious metal could slump below the $1300 an ounce and even test the $1275 (100-day moving average).

Oil has attempted to rise, and WTI tested the $42 a barrel resistance, due to a weaker US dollar. The appreciation didn’t last long, and WTI fell by almost 0.55% moving right above $41.00 a barrel. The global glut environment and the slower demand are driving the prices, and the WTI could soon test the $40.55 a barrel (July 29th low), and continue the bearish trend below the $40. A rise above $41.85 could allow WTI to test the $42 (100-hour moving average), and if this is surpassed, we could see a recovery up to 43/43.30 (200-hour moving average).

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