Financial Market Research and Analysis

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USD softer against G10, except JPY
The recovery in the EURUSD is expected to remain capped heading into the European Central Bank (ECB) meeting due Thursday. The trend remains negative below 1.1080 (major 38.2% retracement on Sep 26th to Oct 14th fall). Breaking below 1.0951 (Jul 24th low), we could see a further extension of losses to 1.0910 (Jun 23rd low), before 1.0880/1.0850 area. Above 1.1080, the short-term bullish reversal could encourage a further rise to 1.1118 (50% retrace) and 1.1156 (major 61.8% retrace).

In Asia, all G10 currencies gained against the US dollar except the yen. The USDJPY remains in bull’s hands, with support holding tight at 103.75 / 103.55 area (200-hour moving average and minor 23.6% retracement on Sep 27th to Oct 13th rise) for a further push toward 105.00, max 105.50. The short-term bias remains positive above 102.89 (major 38.2% retracement).

The GBPUSD surged to 1.2276 on rising inflationary pressures in the UK. The GBP-rally remained short-lived however, the pound eased rapidly to its pre-CPI levels. Sellers remain on the sideways given the oversold conditions in the pound markets, while buyers refrain from stepping in, afraid of a sudden, aggressive sell-off. The short-term resistance is seen at 1.2295 / 1.2305 (major 38.2% retracement on Sep 29th to Oct 7th crash / 200-hour moving average), if surpassed, could bring along a further recovery to 1.2440 (Fibonacci 50% level). Stops are eyed below 1.2080 and 1.2000.

The AUDUSD moves higher, and the strengthening positive momentum encourages the development of a solid bullish trend for a potential test of 0.7710/0.7730 mid-term resistance. Intra-day supports are seen at 0.7640 (minor 23.6% retracement on Oct 13th to Oct 18th rise) and 0.7615 (major 38.2% retrace).

Gold tested $1260 in Asia on the back of a broad based US-dollar retreat. The short-term support is presumed at $1250 (major 38.2% retracement on Dec 16th to Jun 5th rise), while the 200-day moving average ($1276) is seen as a solid ceiling, before $1297 (minor 23.6% retrace).

The WTI find buyers below $50 level. The momentum remains positive yet weakened for a surge toward the $53/$55 mid-term resistance. The key support is eyed at $48.92 (major 38.2% retracement on Sep 20th to Oct 10th rise), which should distinguish between a further positive attempt to $53/55 and a short-term bearish reversal to $47.93 (50% level).

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