Financial Market Research and Analysis

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USD mixed despite dovish Yellen

The EURUSD tanked to 1.0958 on Friday, although the Federal Reserve (Fed) Chair Janet Yellen sounded hesitant regarding potential rate action by the end of this year. The trend remains negative below 1.1069 (major 38.2% retracement on Sep 30th to Oct 14th fall), for a potential extension of losses to 1.0951 (Jul 24th low) and 1.0910 (Jun 23rd low). Above 1.1069, the short-term bullish reversal could encourage a further rise to 1.1104 (50% retrace & 200-hour moving average) and 1.1138 (major 61.8% retrace).

 

The USDJPY market remains in the hands of the bull’s, with support seen in the 103.66 / 103.55 area (200-hour moving average and minor 23.6% retracement on Sep 27th to Oct 13th rise) for a further push towards 105.00, max 105.50. The short-term bias remains positive above 102.89 (major 38.2% retracement).

 

The GBPUSD treads water below the 100-hour moving average, 1.2217. The appetite in pound remains limited given the negative bias due to political risks. The short-term resistance is eyed at 1.2295 (major 38.2% retracement on Sep 29th to Oct 7th crash), if surpassed, could bring along a further recovery to 1.2380 (200-hour moving average) before 1.2440 (Fibonacci 50% level). Stops are eyed below 1.2080 and 1.2000.

 

The AUDUSD bounced off 0.7584, its 200-hour moving average and the major 38.2% retracement on Sep 29th to Oct 13th decline). The formation of a golden cross (50-hour moving average crossing above 200-hour moving average) should encourage the development of a further bullish trend for a potential test of 0.7710/0.7730 mid-term resistance. Below 0.7584, we could see a deeper downside correction to 0.7554 (minor 23.6% retrace) before 0.7455 (Sep 15th low), mid-term support.

 

Gold remained well bid above $1250 (major 38.2% retracement on Dec 16th to Jun 5th rise) in Asia. Despite Fed Yellen’s dovish comments, the Fed hawks remain in charge of the market. Below $1250, the precious metal is expected to re-test $1240, before a sustainable fall toward $1210 (50% level). The key daily resistance is at 200-day moving average ($1275). Only a successful recovery attempt above $1275, could encourage a rise to $1297 (minor 23.6% retrace). 

 

The WTI hovers around the $50 level. The momentum remains positive yet weakened for a surge towards the $53/$55 mid-term resistance. A successful break below $50.15 (minor 23.6% retrace on Sep 20th to Oct 10th rise) should pave the way towards $48.92 (major 38.2% retracement on Sep 20th to Oct 10th rise), which should distinguish between a recovery and a short-term bearish reversal.

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