Financial Market Research and Analysis

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USD gapped higher on FBI announcement
The US dollar gapped higher at the open on news that FBI sent a letter to Congress citing that Hillary Clinton hadn’t committed a crime with her private server. Hectic behavior in the US dollar crosses is on the menu as we are heading into the critical US presidential election, scheduled on November 8th.

The EURUSD tanked to 1.1044 at the open. The short-term critical support, at 1.1030 (major 38.2% retracement on Oct 25th to Nov 4th rise), should keep the bias favourable for a further bullish development to 1.1130 (100-day moving average), before 1.1198 (200-day moving average). Below, the short-term bearish reversal should encourage a deeper downside correction to 1.1002 (200-hour moving average) before 1.0996 (Fib 50% level).

The yen has been the biggest loser (-1.23%) against the US dollar on the back of the FBI-related risk-on rally. The USDJPY reversed the short-term trend, yet the upside is expected to remain capped before Tuesday’s US election. A mean reversion pattern on hourly basis is expected to bring the USDJPY down to 104.18 (200-hour moving average), before 103.58 (100-hour moving average) and 103.25 (50-day hour moving average). Solid offers are eyed pre-105.00 and 105.35 (200-day moving average).

The GBPUSD eased to 1.2423 in Asia. Despite the early US dollar rally, the rising stress in the USD is expected to keep the bias positive for a renewed attempt toward 1.2560 before 1.2622 / 1.2630 (pre-Oct 7th flash crash high / 50-day moving average). Intra-day supports are eyed at 1.2375 (major 38.2% retracement on Oct 25th to Nov 4th rise), 1.2319 (Fib 50% level) and 1.2280 (200-hour moving average).

The AUDUSD diverged positively compared to its G10 peers, as the risk-on rally quickly sent the pair above 0.7664 (minor 23.6% retracement on Oct 28th to Nov 4th rise), after a plunge to 0.7659 at the open. Still, the appetite wanes approaching the 0.7700-handle; solid offers are eyed at 0.7710/0.7730, mid-term resistance area. Intra-day supports are eyed at 0.7643/0.7642 (major 38.2% retrace / 200-hour moving average) and 0.7627 (Fib 50% level).

Gold cheapened by 1.24%, as capital returned to risk assets on FBI’s statement that Hillary Clinton is cleared. The downside is expected to remain capped at $1280 (major 200-day moving average). The upside risks prevail. A sudden reversal in risk sentiment could cause a rapid recovery to $1300, before $1317 (100-day moving average).

The WTI traded above $50/barrel as the Algerian minister said the OPEC will agree on production quotas at next week’s meeting. However, the market remains skeptical on OPEC’s capacity to seal a deal. The bias remains on the downside, for an extension of the weakness toward $44.15 (200-day moving average) before $43 (Sep 19th dip). Offers are eyed at $45.80 (minor 23.6% retracement on Oct 19th to Nov 4th fall) and $47.02 (major 38.2% retrace).

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