Financial market research and analysis

EURUSD continues its slide for the fourth consecutive day. The pair broke the 1.1220, minor 23.6% on Mar 10th – 17th rise, and could well extend losses to 1.1144 (major 38.2%). The MACD is positive but the slope flattens, suggesting that the EUR-bulls are currently losing momentum. Above the 1.1144, the EURUSD will remain in the bullish trend and could renew attempt to 1.1376 (Feb’11 peak). Breaking below the 1.1144, the door will be open for a deeper downside correction with 1.1051/42 (major 38.2% retrace on Dec-Feb rise / 200-dma) before the 1.10 mark.

The yen has been the only winner in Tokyo against the US dollar among the G10 but rapidly reversed gains into the European open. BoJ’s policy board member Funo said the BoJ must maintain easy stance using all three tools at disposal (quantity, quality of asset buys and interest rates) and suggested more fiscal stimulus to sustain the recovery. The USDJPY could make it above the 112.50 handle (daily Ichimoku conversion line) into the European open and could extend recovery with an improved risk appetite following yesterday’s drama in Brussels. Resistance is eyed at 113.7 (minor23.6+% retrace on Feb-Mar slump), before 114.88 (major 38.2) needed to be cleared to consider a sustainable recovery.

GBPUSD has lost more than half of March gains. Cable is now below the Fibonacci 50% level on March rise (1.4175) and could extend weakness to 1.4095 (61.8% retrace) before the 1.40 mark is back on the table. The option market is on fire. The 3-month (25 delta) risk reversals showed that the volume of GBP puts spiked aggressively to an all-time high versus the euro and the US dollar. Investors are increasingly hedging against the Brexit risks. And the terrorist attacks in major European cities add to pessimism.

AUDUSD consolidates. The MACD has turned flat, suggesting that the upside momentum in the Aussie could come to exhaustion and macro funds may find it right to build on their short mid-term positions at the current levels and we could expect to see a retracement down to the 0.75 mark. More support is eyed before the 200-dma (0.7241). On the upside, resistance is expected to remain solid at 0.7680/0.7700.

Gold fell more than $15 on slight improvement in risk sentiment following the Brussels attacks and the stronger US dollar. The $1228/1220 (minor 23.6% retrace on Dec-Mar rally / optionality) should give support before the critical $1200/1995 (major 38.2% retrace). On the upside, offers are

The WTI contracts consolidate above the $40. Trend and momentum indicators are marginally positive, suggesting a further recovery toward the 200-dma ($42.46). On the downside, the 100-dma ($36.30) is expected to lend support before a potential pullback to $35 mark is re-considered.