Financial market research and analysis

EURUSD extended gains to 1.1239 yesterday and hovered around the 1.12 mark in Asia. As we edge the overbought conditions (RSI 68%), a downside correction could be on the line especially if the US releases a solid jobs report. The 1.1054/1.1075 (major 38.2% retrace on the present rally) should maintain the bullish trend toward 1.1260 (Fib 61.8% retrace on Aug-Dec decline). A pullback below the 1.1055 support could hand the market to EUR-bears’ hands and bring the 1.10 mark on the radar. Large vanilla expiries at 1.10 are expected to limit downside attempts before this week’s closing bell.

USDJPY tanked to 116.53 as JGB 10-years grinded toward zero. The post-BoJ gains have been fully erased within a week time and the bearish reversal in trend and momentum indicators suggest further losses to 115.98 (January low & one year low) and certainly below toward the 114.00 trend pivot. The US nonfarm data could, if strong, halt yen’s depreciation against the US dollar. Only surpassing 118.50 (major 38.2% retrace from post-BoJ peak) could cheer up this pair and gather enough momentum for a re-test of 118.84, the daily Ichimoku baseline.

As suspected, Super Thursday capped gains in the sterling market. GBPUSD bounced lower from 1.4660 (Fib 50% on Dec-Jan decline), the slide did not damage the key short-term technical levels. The pair find buyers at 1.4500/1.4515 (minor 23.6% off Jan 21 low of 1.4080) before the critical short-term support at 1.4432 (major 38.2%). Above 1.4432, gains could extend to 1.4707/1.4775 (50% and 61.8% ext. with 1.4432 base). Sliding below 1.4432, the bullish appetite could rapidly fade to pull the air to 1.4365 (Fib 540% retrace) before 1.4297 (Fib 61.8%).

AUDUSD consolidates gains above the 0.7141/48 zone including the 50 and 100 day moving averages and minor 23.6% retrace on May’15-Jan’16 depreciation. The softening dollar continues inspiring investors; fresh long positions in high yielding currencies is appealing especially with tanking yields in EUR, JPY and USD. Surpassing 0.7240 (50% ext. off the 38.2% retrace on Jan 20-Feb 3 rise), an extension to 0.7282/0.7300 is well possible.
The RBA doves are expected to cap the upside below the key mid-term support zone, 0.7340/85 (major 38.2% on May’15-Jan’16 decline / Dec peak).

Gold extended gains to $1157 (minor 76.4% on Oct-Dec decline). With support at $1130/36 (200-dma / Fib 61.8%), gold is expected to consolidate at about $1150/60 before potential attempt to $1190/1200.

WTI is capped by thick offers at the three-month downtrend top (32.75/33.00). The softer US dollar is certainly positive for the oil market, yet there are many explanatory variables factored in at the moment, the volatility, hence the visibility remains limited regarding the intraday moves. The wider picture is still negative due to the expanding global glut. Key mid-term resistance is eyed at $34.50/35.50.