Financial market research and analysis

The European Central Bank (ECB) meeting and Governor Mario Draghi’s press conference should trigger decent price volatility in the euro markets. The dovish ECB expectations are expected to keep the upside limited heading into the meeting, while the decision should give a clearer direction to the euro in the short-term. Breaking above the 1.1340, the EURUSD could gain enough momentum to target 1.1500, before 1.1616 (2016 high). Clearing the 1.1122-support (Aug 31st low), the EURUSD is expected to extend weakness to 1.1045 (Aug 4th low) before 1.1000.

The negative momentum in the USDJPY is waning. The pair trades sideways waiting for a fresh direction. The first support is seen at 101.06 (minor 23.6% on Aug 26th – Sep 2nd rise) before 100.04 (Sep 26th low). Resistances are eyed at 102.20 (Fibonacci 50% level) and 102.70 / 102.82 (major 38.2% retrace / 200-hour moving average.

The weak manufacturing data caused a downside move in the GBPUSD yesterday. The pair traded below its 100-hour moving average for the first time since Aug 31st. The trend remains positive above 1.3296 (major 38.2% retrace on Aug 29th – Sep 2nd advance) for a further recovery to 1.3500 (psychological resistance) and 1.3640 (major 38.2% retracement on post-Brexit sell-off, mid-term resistance to the post-Brexit bearish trend). Below 1.3296, Cable would step in the short-term bearish consolidation zone with support eyed at 1.3250 (Fibonacci 50%), 1.3238 (200-hour moving average) and 1.3205 (major 61.8% retrace).

The AUDUSD extended gains to 0.7705 in Sydney. As the Aussie gains positive momentum, the AU / US rate differential becomes more appealing and could enhance fresh carry inflows into the AUD for a further push toward 0.7750 (Aug resistance). Intra-day support is presumed at 0.7648 (major 61.8% retrace on Aug 16th – Aug 31st decline) and 0.7625 (100-hour moving average).

Gold consolidates gains above its 50-day moving average ($1339). Softer Fed expectations into the September FOMC meeting should allow a further upside development to $1355 and $1370/1375 zone. The $1305 / 1297 (100-day moving average / minor 23.6% retracement on Dec’15 – Jul’16 rise) is seen as a solid mid-term support.

WTI gains momentum on the upside. A break above $46.50 / 46.90 (Sep 5th high / major 61.8% on Aug 18th – Sep 2nd decline) could improve the appetite in oil and encourage a recovery to $47.50 / 48.00. Intra-day support is seen at $45.45 / 45.40 (200-hour moving average / 38.2% retrace) and $42.95 (Sep 1st low).