Financial market research and analysis

The strong US dollar is driving the global currency markets, as the Federal Reserve (Fed) is expected to proceed with a 25 basis points hike at December meeting.

The EURUSD extended weakness to 1.0525 in New York, a pip above the 1.0524-support (Dec 2nd 2015 low), and it is reasonable pursuing a further slide toward 1.0460 (March 2015 dip). Intra-day resistances are eyed at 1.0600 (100-hour moving average), 1.0664 (200-hour moving average), before 1.0708 (minor 23.6% retracement in Nov 9th to Nov 24th decline). Option markets are mixed today, decent put options trail below 1.0530 before the weekly closing bell.

The USDJPY surged to 112.89 on the back of a stronger US dollar and rising US yields. Large 111.50/112.00-call expiries are expected to give a further support for a push to 113.50/114.00, and 114.80 (100-week moving average). Dip-buyers are presumed at 112.00, 111.55 (50-hour moving average), 111.16 (100-hour moving average), max 110.17/110.10 (minor 23.6% retracement on Nov 9th to Nov 23rd rise / 200-hour moving average).

The GBPUSD bounced lower from 1.2468 as UK’s Autumn Statement revealed soft fiscal giveaways, expectations for a larger budget deficit and slower growth post-Brexit. Cable shorts will likely limit the upside potential before 1.2450 (two-day downtrend top), 1.2487 (Fib 50% level on Nov 11th to Nov 18th decline), max 1.2531 (major 61.8% retrace). Decent 1.2400-calls should give a minor support at today’s expiry.

The recovery in the AUDUSD has been abruptly interrupted by a strong USD demand following the FOMC minutes. The bias turns negative with sellers building positions targeting a setback to 0.7310 (Nov 21st low), before a further slide to 0.7300/0.7280. Resistance is eyed at 0.7420 (minor 23.6% retracement on Nov 8th to Nov 21st decline), before 0.7442 (200-hour moving average).

Gold slipped below $1200 for the first time since February. Rising US yields should continue weighing on gold prices for a further slide to $1170 (major 61.8% retracement on Dec’15 to Jul’16 rise). Resistance is eyed at $1205/$1210/$1215 (area including 50, 100, 200-hour moving averages & Fib 50% on long-term Fib retracement, $1208), max 1219 (minor 23.6% retracement on Nov 9th to Nov 24th decline).

The WTI is flat around the $48/barrel, as OPEC uncertainties persist before Nov 30th Vienna meeting. Both long and shorts are on the sidelines. Intra-day supports are eyed at $47.45 (100-hour moving average), $46.75 (major 38.2% retracement on Nov 14th to Nov 22nd rise) and $46.30 (200-hour moving average). Solid offers stand at $50.00.