Financial market research and analysis

The ECB kept the rates unchanged as expected yet Draghi’s press conference has been a dovish surprise. Draghi hinted at further monetary stimulus starting from March. At this point, we do not know whether the ECB is preparing for more action on rates or on QE (or both) but investors already loved it. The euro refused to give up gains before more details however, EURUSD shortly legged down to 1.0778 but rapidly bounced over 1.08 and stabilised within 1.0813/77 in Asia. Euro bears’ failure to gain territory below 1.08 keep the trend and momentum indicators flat. With improved risk appetite however, the bears could get ahead of the game soon and pull the pair to 1.0730/00 weekly level. On the upside, the key mid-term resistance is eyed at 1.1052 (200dma).

Dovish ECB also revived the BoJ doves in Tokyo. USDJPY bounced to 118.19. Trend and momentum indicators turned positive suggesting a further recovery toward 118.95/119.87 (Fib 38.2%/50% on Nov-Jan decline). Intraday support is eyed at 117.50 (200hma). A weekly close above 117.18 (Ichi conversion line) will be supportive of a short-term bullish reversal toward 120.00 mark.

GBPUSD hit 1.4080 as Draghi hinted for more ECB stimulus. Yet Cable found buyers below 1.41 and is up to 1.4241 in London. Trend and momentum indicators are still comfortably negative and could cap the upside attempts. Resistance is seen at 1.4280 (short-term pivot). Surpassing 1.4280, a bumpy recovery toward 1.4392 (minor 23.6% on Dec-Jan decline) could be considered. Key resistance is eyed at 1.4500/555 (major 38.2%).

AUDUSD cleared offers at 0.7000/0.7017 (major 38.2%), and stepped in the short-term bullish consolidation zone. The bias turned neutral from negative, a week’s close above 0.70 should suggest further recovery to 0.7076 (Fib 50%), 0.7034 (Fib 61.8%) before 0.7150/60 (100 and 50-day moving average zone).
Mid-term critical resistance remains at 0.7380 (Fib 38.2%). Below 0.7380, the mid-term bias remains negative and we see opportunity in selling the rallies.

Gold is slightly lower on the session. With support at 1085, the yellow metal could still gather enough momentum to surpass 1105/1115 offers and target 1125/1130 (one-month uptrend channel top).

The squeeze higher is here. Crude oil prices extended gains in early Asia trade Friday after the European Central Bank hinted at more stimulus measures, but despite Saudi Arabia’s comments that a compromise amongst OPEC and non-OPEC producers is needed, the commodity’s expanding global surplus is expected to soon extinguish any price gains.