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Sharp profit-taking in AUDUSD
The euro remains under pressure heading into the European Central Bank (ECB) meeting. The EURUSD extended weakness to 1.0955 on dovish ECB expectations. The event risk is high and traders should stand ready for two-sided volatility. The key Fibonacci resistance, at 1.1078 (major 38.2% retracement) should distinguish between a short-term bullish reversal to 1.1200/1.1280, and a further fall to 1.0910 (Jun 23rd low), before 1.0880/1.0850 area.

The USDJPY rebounded from 103.17 yesterday and traded in a tight range of 103.35/103.78 in Tokyo. The lack of conviction weighs on the positive momentum, yet a sudden attempt toward 105.00, max 105.50 could still not be ruled out. Critical short-term resistance is eyed at 103.00 / 102.89 (major 38.2% retracement), if broken, should suggest a short-term bearish reversal.

Even the combination of a solid inflation and labour data couldn’t give the GBPUSD the momentum it needed for a positive breakout. The pair trades rangebound a touch higher than 1.2240/1.2275 area, including the 50, 100 and 200-hour moving averages. The next resistance is eyed at 1.2440 (Fibonacci 50% retracement on Sep 28th to Oct 7th crash), while support is eyed at 1.2155 (one-week ascending channel base).

The AUDUSD sharply reversed trend after hitting 0.7734 mid-term resistance in Sydney. Profit-taking and tactical shorts sent the pair back to 0.7655, a touch higher than 0.7647 (major 38.2% retracement on Oct 13th to Oct 20th rise). Holding support at this level, we could expect a re-test of 0.7730/0.7750, while breaking below should encourage a deeper correction to 0.7620 (50% level) and 0.7608 (200-hour moving average).

Gold extended gains to $1270 and is preparing to test the mid-term resistance at $1277, the 200-day moving average, for a further advance to $1297 (minor 23.6% retrace). Failure to clear the $1275/1277 resistance should trigger a minor fall to $1255/ 1250 (major 38.2% retracement on Dec 16th to Jun 5th rise).

The WTI is testing the $52 resistance for the second time in two weeks, suggesting that appositive breakout could encourage a surge toward the $53/$55 mid-term resistance. The key support is eyed at $50.18 (minor 23.6% retracement on Sep 20th to Oct 20th rise) and $48.94 (major 38.2% retrace).