Financial market research and analysis

The EURUSD pared Friday’s gains as the US dollar opened the week better bid across the board. The bullish development should find a minor support at 1.0938 (major 38.2% retracement on Oct 25th to Oct 28th rise), below which, the EURUSD will step into the bearish consolidation zone for a renewed attempt to 1.0850/1.0860 (weekly lows).

The USDJPY bounced lower after hitting 105.50 on Friday; the pair has not traded as close to its 200-day moving average (105.66) since Jan’16. The 30-day RSI stands a touch below the overbought market (RSI=61), hinting at a consolidation heading into the Federal Reserve (Fed) and Bank of Japan (BoJ) decisions due this week. Minor support could be found at 104.26 (minor 23.6% retracement on Sep 27th to Oct 28th rise & 200-hour moving average), before the critical 103.44 (major 38.2% retrace).

The GBPUSD traded in the 1.2141-1.2215 range in Asia. Rising political risks in the US could help Cable clearing the minor resistance at 1.2207 (Fibonacci 50% on Oct 19th to Oct 25th decline), before 1.2295 (major 38.2% retracement on Sep 28th to Oct 7th crash) and 1.2330 (weekly resistance). Intra-day supports are eyed 1.2178 (major 38.2% retrace), before 1.2141 (minor 23.6% retrace) and 1.2080. Stops are eyed below. Rumours that the Bank of England (BoE) Governor Carney may announce his decision to quit should cap the upside attempts in the pound.

The AUDUSD extended recovery to 0.7619 in Sydney, yet failed to extend gains above the 0.7616 (major 38.2% retracement on Oct 26th to Oct 28th decline). The failed upside attempt could encourage a pause to 0.7593 (minor 23.6% retrace) before 0.7560 mid-term support. More offers are eyed at 0.7625 (100-hour moving average) and 0.7634 (Fib 50% & 200-hour moving average) before tomorrow's Reserve Bank of Australia (RBA) verdict.

Gold is challenging the 200-day moving average, $1280 on rising US political risks. Clearing 1280-resistance should encourage a further recovery to $1297 (minor 23.6% retrace on Dec’15 to Jul’16 rise). Intra-day support is seen at $1260, while the $1255/1250 (major 38.2% retrace) is expected to maintain the base for the current bullish development.

The WTI extended losses to $48.17 as the OPEC countries failed to agree on individual quotas. The sentiment turns sour as many members ask to be exempt from production cuts for plausible reasons, such as war, violence, and sanctions. Short-term resistances are eyed at $49.33 (minor 23.6% retracement on Oct 19th to Oct 28th fall) and $49.88 (major 38.2% retrace).