Financial market research and analysis

EURUSD remains rangebound. Trend and momentum indicators are neutral, with slight positive bias as the pair tests 1.0877/1.0880 (Fib 38.2% / 100dms) on the upside. Above this level, gains could extend to 1.1000 before the key mid-term resistance eyed at 1.1054 (200dma). On the downside, 1.0805/1.0778 area (minor 23.6% on Aug-Dec’15 decline / post-Draghi low) should lend support.

The yen did little in Tokyo. Although the expectation for a BoJ intervention increases, there is no clear signal regarding this week’s meeting. Japan’s EconMin Amari said that BoJ doesn’t signal monetary easing in advance, that it won’t be as bold as the ECB and appropriate steps will be taken when needed. In fact, the BoJ prefers surprise actions in order to obtain the maximum reaction from the market. Nevertheless, the persistent slide in oil prices is increasingly worrying as it decreases considerably its chances to reach the 2% inflation target. USDJPY continues to see resistance pre-Ichimoku baseline (118.56), more resistance could be expected at the Fib resistance, 118.95 (major 38.2% on Nov-Jan decline). The speculation that the BoJ may intervene should keep the downside limited and the Ichimoku conversion line (117.43) is expected to lend some support. This level also coincides with Fib 50% on Jan 20 – 25 rise. More support is eyed at 117.10/00 area.

GBPUSD continues seeing 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. Given the rising possibility of a rate cut, macro players will certainly stay on the sell-side of the game. Key resistance is eyed at 1.4523 (major 38.2% on Dec-Jan decline). Below this level, traders are expected to remain seller on rallies. Intermediate resistances stand at 1.4255/50 (yesterday’s support turned resistance), 1.4354 (minor 23.6%). Sentiment remains negative and a break of 1.4150 (pivot) should pave the way for a re-test of 1.4080 (last week low) before 1.4040/1.4000 comes in radar.

AUDUSD rallied to 0.7051 and the short-term positive momentum could push for more recovery especially if the USD retreats further and the carry traders decide to step back in the game with improved risk appetite. The short-term critical level at 0.7017 (Fib 38.2%) is being cleared, the short-term bullish reversal could encourage an extension to 0.7075 (Fib 50%).
Nevertheless, the current inflation levels should not keep the RBA back from proceeding with more easing if needed in coming months. Therefore the RBA doves will certainly remain a major drag for the Aussie pre-0.7380 mid-term resistance.

Gold hit $1122. Trend and momentum indicators are comfortably positive and point at a potential recovery to 1130/1132 (one-month uptrend channel top / 200dma).

The oil market remains highly volatile and the hectic price moves around $30 display little visibility from a technical perspective. Above $30/29.50, we may see a short-term recovery to $34.00/34.50. Yet discussions on a possible slide toward $25 are still very much up to the minute.