Financial market research and analysis

After a negative week, EURUSD attempts a bounce to the upside. The 1.1000 support level looks solid, but if broken we could see a new slide to 1.0940 (Fibonacci retracement), then, below this level the pair could plunge to 1.0780 (Fibonacci retracement). A critical resistance level is set at 1.1090 (200-day moving average), if this is surpassed the pair could surge to the 1.1197/1.1200 mark.

The market welcomed the positive result of the election, which strengthens Abe’s coalition in the upper house. The Asian stock markets closed upbeat (Nikkei +3.98% Hang Seng +1.46%) and the yen softened against the US dollar, with USDJPY surpassing the 101.00 mark and trading above the 102.00 mark. The next resistance is seen at 103.38 (July 1st high), and if it’s surpassed the pair could rise towards 104.35 (Fibonacci retracement), then 106.20 (50-day moving average). A critical support is at 100.00/99.99 (July 8th low), and if this is cleared, the pair could slump to 98.99 (June 24th low).

After Friday’s US job report, Cable fell below the 1.3000 mark due to renewed strength in the US dollar, with the market now divided, but still considering the chance of seeing one interest rate hike before the end of 2016. Today GBPUSD is moving below the 1.2900 mark. If the pair clears the 1.2876 support we could see a new slump to 1.2800 and even lower towards the 1.2500 mark. If the pair surges above the 1.3000 mark, we could see a recovery up to 1.3248 (July 4th high).

The short term trend on the Aussie is bullish, but the 0.7600 resistance looks solid. If AUDUSD surpasses that level we could see a further rise towards 0.77, then 0.78 and 0.7834 (April 21st high). A break below the 0.7500 mark could start a new sell-off in the pair, with the next support at 0.7472 (100-day moving average), then 0.7448 (Fibonacci retracement). Below this level the pair could test the 0.7400 mark before the critical support at 0.7330/0.7320 (200-day moving average).

Gold has depreciated by about $10 as US dollar strengthened across the board. The trend for the precious metal remains firmly bullish and we can expect a retracement to test the 1337 support (July 5th low), then a bounce to 1374 (intraday high), and above this level a surge towards the $1400/oz mark. If gold breaks the 1337 support level to the downside, we can expect a new slide to the 1300 mark, then to 1296 (Fibonacci retracement).

Oil prices fell on Monday due to economic weaknesses in Asia and news that US supply has adapted to lower prices. The increased Canadian supply also sees challenges to meet the demand. Also, there are forecasts of a potential further cooling of the Chinese economy. The Q2 GDP read (due out Friday 15th 03:00am BST) could be the lowest in seven years, according to a poll of economists interviewed by Reuters.
Brent dropped 1% to $46.20 a barrel, while WTI dropped to a new low of $44.50 a barrel, and is now attempting a recovery up to $45 a barrel.