Financial market research and analysis

EURUSD remains rangebound. After a bullish attempt to 1.0968 in New York yesterday, the pair is back to 50/61.8% retracement area from last week’s ECB meeting. Trend and momentum indicators remain neutral with a slight positive touch. January high, 1.0985, should be cleared to build up enough momentum to challenge offers at 1.1000. Key mid-term resistance eyed 1.1055 (200dma). On the downside, 1.0854 (Fib 38.2% retrace) and 1.0805/1.0778 area (minor 23.6% on Aug-Dec’15 decline / post-Draghi low) should lend support.

As the BoJ surprised by adopting negative interest rates, USDJPY surged to 121.42 in a single move. Technical and fundamental picture have dramatically changed. USDJPY has certainly stepped in a mid-term bullish consolidation zone and decent vanilla calls will likely lend the first support at 120.00 before the weekly closing bell. From a pure technical point of view, the post-BoJ bull move should find support at 120.31 (Fib 38.2% retrace) to push for further gains. Resistance is seen at the daily Ichimoku cloud top (121.83) for a short-term correction to counter the knee-jerk rally.

GBPUSD struggles to clear resistance at 1.4354 (minor 23.6% retrace on Dec-Jan decline) and even surpassing this level, Cable is expected to face a choppy path upwards. Intermediate resistances are eyed at 1.4410 (pivot) and 1.4425.
The key mid-term resistance is eyed at 1.4523 (major 38.2% on Dec-Jan decline). Below this level, traders are expected to remain seller on rallies. From a macro point of view, negative rates from the BoJ could revive the BoE doves amid BoE’s Carney hinted at a possibility of a rate cut earlier this week.

AUDUSD extended gains to 0.7141, just a notch lower than 0.7149/52 zone (100 and 50 day moving averages respectively). Above 0.7022 (major 38.2% on Jan 20 –to-date rise), the AUDUSD should have enough momentum to re-test the 0.7150 resistance and attempt an extension to 0.7305 (Jan high). Vanilla calls should help keeping the ground solid above 0.7085 before the closing bell.
Mid-term critical resistance remains at 0.7380 (Fib 38.2%). Below 0.7380, the mid-term bias remains negative and we see opportunity in selling the rallies.

Gold is down to $1108.45 amid the BoJ surprise action on rates. The key short-term support is eyed at $1101 (major 38.2% retrace on January rise), resistance should come into play at 1128/1132 ( Jan 27 high /one-month uptrend channel top and 200dma).

Oil hit $34.80 in New York yesterday. Downside risks prevail however and the risk of a slide back below $30 is considerable.