Financial market research and analysis

Our analysts have their fingers on the pulse of the world's financial market news.

CFD trading is high risk and may not be suitable for everyone.
USD in focus pre-ADP report
EURUSD dipped at 1.1132 in New York yesterday. Trend and momentum indicators remain comfortably negative pre-the ADP data release in the US (at 12:15GMT). There is room for a further drop towards 1.1045 (August lows) before the 1.10 handle. Intraday resistances could be found at 1.1220 (major 38.2% retracement on Aug 8th to Aug 30th decline) and 1.1260 (200-hour moving average).

The yen has been the only G10 loser against the US dollar in Tokyo. Higher US yields and expectations of a new monetary stimulus in Japan continue keeping the bias on the upside. The strengthening positive momentum suggests a further recovery in the USDJPY toward 105.00 / 107.45 area, should the pair hold support at 102.00, the major 38.2% retracement on post-Jackson Hole rally.

The GBPUSD trades sideways within the 1.3055 / 1.3120 (Jackson Hole dip / the major 38.2% retrace on August rise). On the back of a stronger US dollar, we continue calling for a viable mid-term downside correction in Cable. The 1.3135 – 1.3143 (100 and 200 hour moving averages respectively) should provide a solid intraday resistance. The critical support stands at 1.3000, then at 1.2865 (Aug 15 dip).

AUDUSD extended losses to 0.7500 on the back of a broad-based USD demand. The pair is testing the 0.7525/0.7500, if broken, should pave the way toward the July support zone of 0.7440/0.7420. The carry traders remain on the sidelines before today’s ADP employment data and Friday’s nonfarm payrolls in the US. Intraday offers abound at 0.7575 / 0.7598 area including the 100 and 200-hour moving averages respectively.

The strong US dollar story has taken its toll on gold prices. The precious metal traded below the $1310 (July support) in New York yesterday. There is a rising possibility of a further dip at $1300 / 1297 (100-day moving average / minor 23.6% retracement on Dec’15 – Jul’16 rise).

WTI futures shortly dipped at $43.75 in New York. Of course, the stronger US dollar continues weighing on the barrel of WTI. Combined with a fading conviction that next month’s OPEC meeting could lead to an agreement to limit the oil production, a move down to the $45 is only a matter of time. The EIA report could trigger a price move in the US session. We maintain our bearish view below $47.10, the major 38.2% retrace on Aug 19th – Aug 30th drop.