Financial market research and analysis

The EURUSD remain capped right below the 1.1100/1.1133 area, due to concerns about the Brexit contagion in the Eurozone and Italian banking turmoil. A break above the 1.1133 (Fibonacci retracement) could attract more bids and cause the pair to surge to 1.1200/1.1225. If the pair drops below 1.1020 (Fibonacci retracement) we can expect a further slide towards 1.1000 and, below this level, a slump to 1.0910 (June 24th low).

The Asian stock markets surged for a second day (Nikkei +2.46%, Hang Seng +1.47%), and the yen moved lower for the second day. This is on the back of expectations of no interest rate hikes in the US, and after Japanese Prime Minister Shinzo Abe confirmed the plan to add fiscal stimulus, in order to support domestic demand. USDJPY moved above to 103.50 and is now heading to test the next resistance level at 104.28 (Fibonacci retracement), if surpassed the pair could accumulate gains towards 105.00 then the 106.00 mark. First support at 102.45 (intraday low) then if this is broken, a second support can be found at 100.51 (July 11th low).

Following the end of the Conservatives leadership contest, Theresa May has been confirmed to be next the UK Prime Minister, due to take office by Wednesday night. The nominee has reassured investors that have started to buy the British pound once again. Cable bounced from the lowest levels in 31 years, and now is trading above the 1.3100 mark. GBPUSD’s next resistance is seen at 1.3348 (Fibonacci retracement), and, once this is surpassed, the pair could recover up to 1.3660.

The Aussie found more momentum due to the rise in the commodities markets, and the Asian markets second day of rally. AUDUSD trades above 0.7600 and if it surpasses 0.7644 (June 24th high), we could see a new rise towards 0.7700 then the 0.7800 mark. A break below the 0.7600 mark could cause a slide with the next support level at 0.7500, then 0.7477 (100-day moving average).

Gold is holding at the 1350 level, sliding 24$ lower from the July 11th high. Investors are moving ‘risk-on’ due to fading political uncertainties in the UK, after the nominee of Theresa May as the new Conservatives leader and next Prime Minister.

According to a new report, Europe could be dependent on foreign and often geopolitically unstable regions for 80% of the imported oil. These regions are Russia, Libya and Iraq.
Oil has fallen and WTI reached a two month low yesterday at 44.40. Today the price is bouncing up to 45.50$ a barrel, due to a weaker US dollar. The short term trend remains bearish and we could see an inversion if the price could surpass 45.85/46.00$ a barrel.