Financial market research and analysis

EURUSD consolidates just above the key short-term support at 1.1067 (major 38.2% retracement on post-Draghi rally) before the critical FOMC verdict due at 18:00GMT. If the EURUSD manages to find a base at this level, we could expect a further bullish trend to develop toward the 1.1376 (Feb 11th high), especially if the US dollar shows signs of weakness following the FOMC decision. A slide below 1.1067 should signal a short-term bearish reversal and encourage a downside correction toward the 1.1000 mark before the 1.0917 (100-dma) and then to 1.0826 (Mar 2nd low). From a medium term point of view, a break below this level could pave the way to 1.0800/10 (February lows) then all the way down to the 1.0725 (minor 74.6% before 1.0524 (Dec low). 

USDJPY found a base at 113.00 mark amid BoJ’s Kuroda said that the interest rates could theoretically be pulled down to -0.50% level. The ball is in Fed’s hands now. Should the USDJPY manage to stay over the 113.34, Ichimoku’s conversion line, then a further rise to 114.44 (March 10th high) could be considered before the critical 115.08 (major 38.2% retrace on Jan 29 – Feb 11 decline). Clearing the 113.00 mark, the USDJPY could well resume a fresh slide down to the 110.99 (February dip).

GBPUSD hit 1.4085 before today’s budget announcement and tomorrow’s BoE MPC meeting (where the BoE is expected to maintain the status quo). The pound has lost against all of its G10 peers over the past month as the market increasingly factors in the Brexit risks. Should Osborne manage to sweeten the sour austerity package, then we could certainly look for the pound cheapening below 1.40 mark in the coming days. Light option barriers are hanging at 1.4135/1.4140 for today’s expiry. The euro-pound could then gather enough momentum to fight back the 0.80 offers.
From a technical point of view, the first level of resistance is eyed at 1.4136 (50% retracement on Feb-Mar rise), before the critical short-term level of 1.4207 (major 38.2% retrace) which should distinguish between a further slide to 1.40 mark and a recovery to 1.4240 (200hma) and 1.4437 (Mar 11th high).

AUDUSD consolidates losses below the 75 cents mark.  The FOMC decision is expected to give more clarity regarding the short-term direction. Support is seen at 0.7413 (minor 23.6% on Jan – Mar rise), before the 0.7300 (major 38.2% retrace). The 0.73 mark should distinguish between a recovery back above the 0.75 mark, for a re-test of 0.7594 (Mar 14th peak) and even 0.7655 (Fib 61.8% retrace on May’15-Jan’16 decline). A slide below 0.73 support could encourage a further downside correction to the 200-dma / 100-dma area (0.7245 / 0.7175).

Gold consolidates slightly above the minor 23.6% on December-March rally, 1228.42. The broad based strengthening in the US dollar before the FOMC meeting could continue weighing in the yellow metal, and if $1225/1220 is cleared, we could well expect a further sell-off down to $1200 mark. On the upside $1245/1250 is expected to shelter offers, before a potential breakout for a re-test of the critical $1285/1300 resistance zone.

Oil prices recovered overnight, the WTI consolidates above the 50-dma ($36.50) after two days of sell-off following Iran’s announcement to push production to 4 million barrel a day. WTI is testing the 200-hma ($37.11), if cleared could encourage a recovery back to $39 (Mar 11th peak) before further gains toward $40 mark are considered. A renewed slide below the 50-day moving average ($36.51) could pave the way toward the $35 mark and even to $34 (major 38.2% retrace on Feb-Mar recovery). Below $34, the WTI will step in the bearish consolidation zone and a deeper correction could then develop down to $32.50 (Fib 50%) before $31.00 (Fib 61.80% retrace) and $30 mark.