Financial Market Research and Analysis

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US dollar soften ahead of Fed
The US dollar rose to the strongest level in two weeks, with investors selling off the riskier currencies ahead of the central bank meeting in the US, the UK and Japan. The EURUSD finds buyers around 1.1185/1.1200 area and pushes the pair to 1.1235 (100-day moving average). If that level is surpassed, we could see an upside towards 1.1295 (50-day moving average) and to 1.1359 (23.6% Fibonacci retracement on December to May rise). First support is seen at 1.1200/11185 (38.2% major Fibonacci retracement), and if this area is cleared, we expect a fall to 1.1069 (50% Fibonacci retracement), which could represent a bearish inversion of the mid-term trend.

The yen approaches its strongest level since October 2014, with investors moving progressively on safe haven assets, as they are concerned about the recent Brexit polls and talks. Asian markets bounced higher after four consecutive sessions of declines (Nikkei +0.38%, Hang Seng +0.30%), and the USDJPY pushes in small recovery to 106.30.

An increased number of polls, eight days ahead of the UK vote, shows that the Brexit scenario is a real possibility. Investors are increasingly hedging against a further decline in sterling. The GBPUSD bounced above 1.4200 on broad based US dollar weakness ahead of the Fed's monetary policy decision due later in the day.
The first resistance level is seen at 1.4300 (50% Fibonacci retracement on February to May rise), and if this is surpassed, Cable could continue the recovery towards 1.4412 (38.2% major Fibonacci retracement). The critical support is eyed at 1.4055 (76.4% Fibonacci retracement), if broken could cause a the pair to plunge to 1.3834 (Feb 28th low).

Asian markets traded on a positive note, and the recovery in the commodity markets kept the AUDUSD well bid above the 0.7325 support. The pair bounced higher towards the 0.7400 resistance. The next resistance is seen at 0.7446 (61.8% major Fibonacci retracement on January to April rally), if surpassed, we could see a new upside towards 0.7500 mark and 0.7593 (76.4% Fibonacci retracement).

Gold retreats to $1283 after having hit a five-week high, $1291. (This is not a sentence). Gold could find a good support at the 1277/1280 (100-hour moving average). If this level is cleared, the precious metal could see a slide to 1260 (200-hour moving average) and then to 1243 (76.4% Fibonacci retracement). Looking at the upside, we see resistance level around the 1300/1305 (May 2nd top level). If these levels are surpassed, we can expect further appreciation towards 1345 (July 2014 top levels).

WTI find buyers at 48.00$ a barrel. Oil inventories in the US (at 3.30GMT) and the Fed monetary policy decision (at 7:00 GMT) could cause volatility in oil's price. Support is seen at 47.00/47.25 (May 18th low), resistance at 51.64 (June 8th high).

CFD trading is high risk and may not be suitable for everyone.