Financial market research and analysis

EURUSD gained to 1.0963 as the risk of in Asia encouraged safe-haven flows toward the single currency. Trend and momentum indicators remain flat and a breakout of the 1.0800/1.1050 is needed to asses a fresh short-term direction. The key mid-term resistance is eyed at 1.1051 (200dma). The ECB is expected to maintain the status quoi at this week’s meeting, the accompanying tone will be important. Until then, we see little incentive to step out of 1.08/1.1050 range in EURUSD.

USDJPY took out the Aug’14 low of 116.18. The pair treaded steadily down from Ichimoku’s conversion line (117.63), which should shelter some offers for the day. More resistance is eyed at 118.30 (minor 23.6% on Aug-Sep decline). Buyers are expected to step in at 116.0./115.75 zone.

Following Carney’s speech, GBPUSD tanked below the critical support of 1.4250 yesterday. As long as the Fed sticks to its plan including three-to-four hikes throughout this year, the divergent Fed/BoE policy outlook could further weigh on Cable. The break below 1.4250 could gather more momentum for an attempt down to 1.4040/1.4000 psychological support.

AUDUSD continues seeing support at 1.6830/45 zone, if broken will target 0.6800 mark before 0.6765/0.6750 weekly level). Resistance is building stronger pre-0.6945 (minor 23.6% on Dec 31 to date decline). More offers are touted pre-0.7000/0.7017 (major 38.2%).
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.

The run for safety sent gold to $1095. The major 38.2% level (1092) is now being cleared, this could encourage an extension toward 1100/05 before 1115.

WTI legged down to a fresh low of $27.52. Further slide to $25 is not a delusion but with many pundits in a race to predict more dramatic declines and the fact that this oil price demise is firmly in the mainstream media, we cannot rule out a volatile short squeeze higher.