Financial market research and analysis

The EURUSD is testing the 1.1200 resistance, if cleared, could encourage further gains to 1.1226 (100-day moving average), then to 1.1357 (76.4% Fibonacci retracement on December to May rise). On the downside, support is seen at 1.1130 (200-day moving average), if cleared, could give way to 1.1070 (50% Fibonacci retracement).

The Japanese cabinet approved a fiscal package worth of 28.1 trillion yen ($130 billion) in another attempt to boost the economy. The package includes 7.3 trillion yen budget for local government spending, and another 6 trillion yen in fiscal investment, which is not included in government's budget. As investors perceived the newest fiscal measures as insufficient to foster growth in Japan, the USDJPY slipped below 102.00, and is presently testing the 101.50 (88.6% minor Fibonacci retracement on January to June decline), before 100/99.99 (July 8th low). The first resistance is seen at 102.87 (intraday high), if surpassed, the pair could climb to 104.27 (Fibonacci retracement & 50-day moving average). Above this level, USDJPY could recover to 106.70 (100-day moving average).

The GBPUSD stepped in the short-term bullish consolidation zone, above 1.3217, major 38.2% on July 15 – July 26 decline. We warn that bears could well be around the corner, as the Bank of England is expected to lower its economic forecast and cut the bank rate on Thursday meeting.

The Reserve Bank of Australia (RBA) cut its overnight cash rate by 25 basis points to a new record low of 1.50%. AUDUSD tanked to 0.7491, yet rapidly rebounded to consolidate above the 200-hour moving average, 0.7510. Next resistance is eyed at 0.7600/0.7693. Above this level, the pair could extend gains to 0.7832 (April 21st high). The support is seen at 0.7500/0.7486 area (intraday low), if broken could encourage a slide towards the critical support 0.7352 (200-day moving average).

Gold extended gains for a third session in a row. A further rise to $1374 (July 11th top level) is possible before $1400. The first support is seen at $1345 (August 1st low), if broken, could cause a pullback to 1330/1328 (July 29th low). More support is eyed at $1310 (July 21st low) and $1300 mark.

The global glut concerns are driving the oil prices lower. WTI dropped below $40.00 for the first time since April. The bearish momentum is gaining traction. A break below $39.80 (August 1st low) could encourage a further sell-off to $38.00. On the upside, we need a rise above $40.26 (intraday high) to start a recovery. The next resistance is eyed at $40.82 (50-hour moving average). Above this level, we see the WTI rising towards $41.37 (100-hour moving average).