Financial market research and analysis

EURUSD opened flat in Asia and promptly fell in London trade (-0.94%). The break below the key 200-dma support (1.1049) paves the way toward the 1.10 handle and the 100-dma (1.0958). Trend and momentum indicators point to the downside with resistance expected to come into play at 1.1160, Fib 38.2% retrace on Jan 29 – Feb11 rise. Only a break above should signal an improvement in sentiment for a recovery to 1.1243 (minor 23.6% retrace) and 1.1376 (Feb 11 peak).

USDJPY tests the Ichimoku’s conversion line (113.13) on the upside but there is limited enthusiasm given the broad based USD weakness. Trend and momentum indicators remain comfortably negative, suggesting a further slide toward the next critical level at 110.99 (Feb 11 dip). On the upside, resistance is seen at 113.50/113.75 (former support turn resistance / 200hma).
The Fibonacci level of 115.08 (major 38.2% retrace off Jan 29 high 121.69) should distinguish between the current downtrend and a potential reversal in yen’s appreciation. Only surpassing 115.08 could signal a potentially sustainable recovery to 116.34 and 117.60 (Fib 50% and 61.8% retrace).

GBPUSD started the week as the worst performer against the US dollar (-2.17%) as PM Cameron fixed the Brexit referendum to June 23rd. There is decent resistance at 1.4354 (minor 23.6% retrace on Dec-Jan fall), the MACD stepped in the bearish zone this Morning suggesting a further extension toward 1.4080 (Jan 21 dip) if broken will place the 1.40 handle under decent pressure. Option puts at 1.4200/1.4275 should lend a hand to the bears.

AUDUSD surpassed the Fibonacci resistance, 0.7140 (61.8% retrace on Feb 4 – 9 decline) and presently tests offers at 0.7180/0.7200. Last week’s close above the 0.7105 (major 38.2% retrace on Feb 9-Feb 16 rise) gave hope to carry traders, the risk-on sentiment in Asia helped. Next supports are eyed at 0.7080 (Fib 50%), 0.7055 (Fib 61.8%) before the0.7020 mid-term support.
In the mid-term, the dovish RBA should keep the upside limited. Mid-term resistances are eyed at 0.7278 (200-dma) and 0.7340/85 (major 38.2% on May’15 – Jan’16 slide / Dev’14 high).

Gold is lower as money flows into risk assets this Monday. The $1200 support is at danger. Below this level, we will watch the Fib 38.2% retrace on Dec-Feb rally to lend support to the current bullish development for a potential mid-term recovery toward 1250/1260 (Feb 11 peak). Below 1180, a further slide to $1055 (Fib 50%) could be considered.

The $32 resistance (4-month downtrend channel top) is still at play and prevents WTI from a possible extension toward $32.70 (50dma) before $34.50/35.50, mid-term resistance. Failure to break above $32 keeps the WTI within the down-trending channel, with decreasing conviction however that the price of a barrel could fall to $25.