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USD in focus pre-ADP report
EURUSD dipped at 1.1132 in New York yesterday. Trend and momentum indicators remain comfortably negative pre-the ADP data release in the US (at 12:15GMT). There is room for a further drop towards 1.1045 (August lows) before the 1.10 handle. Intraday resistances could be found at 1.1220 (major 38.2% retracement on Aug 8th to Aug 30th decline) and 1.1260 (200-hour moving average).

The yen has been the only G10 loser against the US dollar in Tokyo. Higher US yields and expectations of a new monetary stimulus in Japan continue keeping the bias on the upside. The strengthening positive momentum suggests a further recovery in the USDJPY toward 105.00 / 107.45 area, should the pair hold support at 102.00, the major 38.2% retracement on post-Jackson Hole rally.

The GBPUSD trades sideways within the 1.3055 / 1.3120 (Jackson Hole dip / the major 38.2% retrace on August rise). On the back of a stronger US dollar, we continue calling for a viable mid-term downside correction in Cable. The 1.3135 – 1.3143 (100 and 200 hour moving averages respectively) should provide a solid intraday resistance. The critical support stands at 1.3000, then at 1.2865 (Aug 15 dip).

AUDUSD extended losses to 0.7500 on the back of a broad-based USD demand. The pair is testing the 0.7525/0.7500, if broken, should pave the way toward the July support zone of 0.7440/0.7420. The carry traders remain on the sidelines before today’s ADP employment data and Friday’s nonfarm payrolls in the US. Intraday offers abound at 0.7575 / 0.7598 area including the 100 and 200-hour moving averages respectively.

The strong US dollar story has taken its toll on gold prices. The precious metal traded below the $1310 (July support) in New York yesterday. There is a rising possibility of a further dip at $1300 / 1297 (100-day moving average / minor 23.6% retracement on Dec’15 – Jul’16 rise).

WTI futures shortly dipped at $43.75 in New York. Of course, the stronger US dollar continues weighing on the barrel of WTI. Combined with a fading conviction that next month’s OPEC meeting could lead to an agreement to limit the oil production, a move down to the $45 is only a matter of time. The EIA report could trigger a price move in the US session. We maintain our bearish view below $47.10, the major 38.2% retrace on Aug 19th – Aug 30th drop.
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