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US dollar gains, yen is still in demand

EURUSD topped just below the 1.1350 on a better bid USD. The February peak of 1.1376 is still around the corner and surpassing this level, the euro-bulls could gather enough momentum to aim the 1.15 mark after five months. Pullbacks are expected to find support at 1.1140 (major 38.2% on Match 10 – 17 rise). Only a break below this level could signal a downside correction to meet the 200-dma (1.1043).

The yen is the only gainer among the G10 versus the US dollar today. The USDJPY tanked to 110.67. The MACD is about to  step in the bearish zone and suggests a further fall to 107.25 (Major 38.2% retrace on September 2012 – June 2015 rally) will be the level to watch. A slide below the critical 107.25 should push the USDJPY in the mid-term bearish consolidation zone and could hint at a deeper downside correction to 105 handle.

The pound rallied 450 pips against the US dollar as the Bank of England once again, repelled speculations of a potential BoE rate cut. GBPUSD is testing the 1.45 resistance and could potential surpass this level to extend gains toward the 100-dma (1.4661). GBP-bulls should, however, keep in mind that pending Brexit risks could trigger waves of GBP-unwind. Digging into the options market, investors are increasingly hedging against the risk of a pound depreciation moving into June 23rd Brexit referendum. From a technical point of view, the pair could extend gains to 1.4668 (Feb high), while the failure to break above the 1.45 resistance should encourage a setback to 1.4242 (200-hma) before 1.4207 (major 38.2% retrace off the Feb 29 low).

AUDUSD extended gains to a fresh 8-month high (0.7680). The RSI (68%) hints that the upside momentum could come to a point of exhaustion at the current levels. As the RBA officials have started to voice their discomfort with the appreciation in the Aussie, the 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 (0.7244).

Gold retraces the post-FOMC gains. The $1250 is expected to lend some support before the minor 23.6% on December-March rally, 1228.42. On the upside, offers remain solid at $1285/$1300.

The recovery in oil continues. The WTI contracts trade at $40 for the first time in more than three months and the stronger positive momentum could encourage a further recovery toward the 200-dma ($42.75). On the downside, the 100-dma ($36.43) is expected to lend support before a potential pullback to $35 mark is re-considered.