Financial market research and analysis

The significantly weaker-than-expected expansion in the US ISM non-manufacturing component triggered an aggressive sell-off in the USD, pushing the EURUSD to 1.1263 in New York. The rally could be a good sell-the-top for the European Central Bank (ECB) doves into Thursday’s monetary policy meeting. On hourly basis, the Golden Cross (the 50-hour moving average crossing above the 200-hour moving average) provide a support for a further upside attempt, yet gains are expected to remain limited at 1.1265 (Sep 7th high) and 1.1290 (minor 76.4% retrace on Aug 8th – Aug 31st decline). Clearing the 1.1122-support (Aug 31st low), the EURUSD is expected to extend weakness to 1.1045 (Aug 4thlow) before 1.1000.

The USDJPY tanked to 101.21 on the combination of less dovish expectations on Bank of Japan (BoJ) and less hawkish expectations on Federal Reserve (Fed). The USDJPY stepped in the short-term bearish consolidation zone after breaking the 102.71, the major 38.2% retracement on post-Jackson Hole rally. The pair is gathering enough momentum to target the 100 level in the continuation of the current sell-off. Intra-day resistances are eyed at 102.20 (Fibonacci 50% level) and 102.70 / 102.75 (major 38.2% retrace / 200-hour moving average).

The GBPUSD extended gains to 1.3444 on the back of a soft US dollar. There is room for a further recovery to 1.3500 (psychological resistance) and 1.3640 (major 38.2% retracement on post-Brexit sell-off, mid-term resistance to the post-Brexit bearish trend). Intraday support is seen at 1.3352 (minor 23.6% retracement on Aug 29th – Sep 2nd advance) and 1.3296 (major 38.2% retrace).

The AUDUSD advanced to 0.7689 on broad based USD sell-off. As the Aussie gains positive momentum, the AU / US rate differential becomes more appealing and could enhance fresh carry inflows into the AUD for a further push toward 0.7700/0.7750 area. Intra-day support is presumed at 0.7587 (38.2% retrace on Aug 16th – Aug 31st decline) and 0.7573 (200-hour moving average).

Gold took away the 50-day moving average ($1337), and extended rally to $1352.75 in Asia. Fading Fed expectations should give a further support to gold for a recovery to $1355 and $1374 / 1400 zone. The $1305 / 1297 (100-day moving average / minor 23.6% retracement on Dec’15 – Jul’16 rise) is seen as a solid mid-term support.

WTI treads water at about the $45/barrel. Intra-day support is seen at $44.45 (23.6% retrace on Aug 18th – Sep 2nd decline), before $42-95 (Sep 1st low). On the upside, the $45.63 (200-hour moving average) is where the buyers would bump into sellers. More resistance is eyed at $46.14 (50% level) and $46.89 (major 61.8%).