Financial Market Research and Analysis

Our analysts have their fingers on the pulse of the world's financial market news.

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Yen tanks post-BoJ, Fed in focus
The EURUSD has fully given back a month worth of gains and is ready to test the 1.1120 on the downside. A break below the 1.1100/1.1085 should encourage a further sell-off toward the 1.1000 mark. The short-term bias will remain negative below 1.1200 (major 38.2% retracement on Sep 8th to Sep 21st decline). Surpassing 1.1200, the bullish trend reversal could encourage buyers for a recovery to 1.1300/1.1327 (Sep 8th resistance).

The USDJPY rallied after the Bank of Japan (BoJ) tweaked the monetary policy to allow flexibility in the monetary base in order to have a QQE (Quantitative Easing) with yield curve control. The markets bought into the BoJ's decision. The pair is expected to expand gains above 101.90 (major 32.8% retrace on Sep 14th to Sep 21st decline). Clearing 103.35/103.50 should encourage a further recovery toward 104.50/105.00 mid-term resistances. Support is eyed at 101.55/101.00.

The GBPUSD extended losses below the 1.30 handle. The negative trend strengthens heading into the Federal Reserve (Fed) decision with the possibility of a further sell-off toward 1.2950 and 1.2865 (mid-Aug lows). The upside risks prevail due to a potentially dovish surprise from the Fed later in the day. If this is the case, we could see a short squeeze in the pound. The critical resistance is eyed at 1.3138 (major 38.2% retracement on Sep 6th to Sep 21st decline).

AUDUSD treads water close to 0.7554 (major 38.2% retracement on Sep 8th to Sep 13th decline). The USD-leg is expected to define the short-term trend. Intraday resistances are eyed at 0.7587 (Fibonacci 50% level) before 0.7622 (major 61.8% retrace). Minor support should come in play at 0.7522/0.7520 (200 and 100-day moving averages), 0.7511 / 0.7500 (minor 23.6% retrace / ascending baseline). The critical support is seen at 0.7440/0.7420.

Gold is marginally cheaper on the back of a broad based USD strengthening. The short-term appetite in gold is contingent on the US dollar. The $1305 / 1297 zone (100-day moving average / minor 23.6% retracement on Dec’15 – Jul’16 rise) is seen as a solid mid-term support, while the upside is expected to remain capped at $ 1332 (50-day moving average) and $1347, two-week downtrend channel top.

The WTI pares losses despite a stronger US dollar across the board. Solid short-term support is eyed at $45.80, $46.40 and $47.50. On the downside, support should come into play at $44.10 (50, 100-hour moving averages) before a potential bearish reversal toward $43.00, $42.25 and $41.30.

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